Chinese Semiconductor Equipment Market Surged to $18 billion in 2020. What’s Next?

Published  January 17, 2022   0
S Staff

China grew 30.6 percent in 2020 to reach $39.8 billion in total sales, which showcases vigorous yearly growth of 36 percent, 23 percent, 32 percent, and 23 percent for the fabless, IDM, foundry, and OSAT sectors, respectively.

The current survey report from the US based Semiconductor Industry Association (SIA) clearly mentioned that from 2020 to the end of 2024, the semiconductor market in China would escalate from 9 percent to 17 percent. While the experts also believe that the same market in South Korean regime would remain immobile and the companies associated with semiconductors in the country would witness a growth minute to 20 percent or close to it. 

The report added, “The scale of the Chinese semiconductor sector is estimated to reach US$116 billion in 2024 by showing an average annual growth of 30 percent from this year to 2024.” Now, the investment in capital equipment by China is also mounting because the semiconductor equipment market has reached $13 billion in 2018 and soared to $18 billion in 2020, which is dominant in the international market. Initially, the country faced numerous hurdles to grow its semiconductor sector, but the domestic manufacturers were supported massively by the government in terms of investment, a powerful domestic market, and the country’s in-house hyperscale platform firms, thereby making China globally competitive. 

Experts from both South Korea and the US are worried about the matter and are now thinking deeply to tackle the grave situation. SIA also further added that back in 2015, USA recorded 50 percent sales in semiconductors globally, which is likely to be reduced by 40 percent towards the end of 2024. An anonymous spokesperson of SIA told the media, “In China, 28 semiconductor plants are currently under construction with an investment of US$26 billion. Chinese semiconductor manufacturers are working very closely with the central and local governments providing huge subsidies and incentives."

Moreover, expertes also opined that if this swift growth continues every year, then by the end of 2030, the country will turn into a leader in semiconductor manufacturing and FABs, capturing 24 percent of the international market share. An interesting factor in this growth aspect is that from 2019 to 2021, at least six large ventures flopped badly in the Chinese semiconductor ecosystem that includes Quanxin Integrated Circuit Manufacturing and Wuhan Hongxin Semiconductor Manufacturing. According to some sources in Chinese media, the Chinese government offered US$2.3 billion for the six projects.