The Strength of China’s Semiconductor Industry
China Expands its Dominance over the Semi Industry
For anyone wondering why economists have been so concerned with the recent slowdown in Chinese economic growth, we recommend taking a closer look at the Chinese semiconductor industry. Earlier this year, PwC released its seventh update to its original study of China’s impact on the semiconductor industry; for anyone following that sector, it seems to us essential reading.
Raman Chitkara, PwC’s global leader for their technology practice, wrote the introduction to the study, the opening paragraph of which will stop many global practitioners in his or her tracks:
China’s domination in semiconductor consumption continues with no near-term challenge from any other country. The ongoing mobile computing explosion, marked by rapid proliferation of smart phones and tablets, helped China further consolidate its position as the leading consumer of semiconductors, accounting for 47 percent of the global semiconductor market.
The Emergence of China’s Dominance
Were you aware that nearly half of the world’s semiconductors were being consumed by China? Some other interesting metrics Chitkara shares in his introduction:
- China’s semiconductor industry has shown a 10-year CAGR of 24 percent.
- China’s design or fabless semiconductor sector had revenues of $200 million. they were $7 billion.
- the first Chinese billion-dollar IC design firm emerged.
- Two of the world’s five fastest growing IC design firms are Chinese.
PwC says that these industry advancements are supported by China’s top position in technology and semiconductor IPOs, their rising percentage of original issue semiconductor patents, and, as usual, the Chinese government’s policy initiatives promoting domestic innovation.
These are weighty considerations for anyone involved in semiconductors, and good reasons to read the full study, which includes a number of conversations with Chinese semiconductor executives and analysts. We highly recommend looking at this report.
You weigh in…
What are the implications for global semiconductor manufacturing?