China Semi-Conductor Market Captures nearly 60% of the Global Share
Semi-conductor Market Scale
According to PwC, global semi-conductor market has expended to $354 billion, $30 billion more than last year. China captures nearly 60% of the global semi-conductor market share as the largest consuming market, followed by USA, about 12%, then Europe 6% and Japan 5.5%.
Not only on semi-conductor consumption, there is also a strong expansion on manufacture in China. According to data from BizVibe, the growth rates on semi-conductor consumption and manufacture in China have always been higher than global average.
For example, China semi-conductor industry had risen by 18.7% CAGR from 2005 to 2015, also a CAGR at 14.3% on consumption, while global semi-conductor market experienced a CAGR at 4% in the same period. Thus BizVibe estimates that China would overtake USA to as the new leader of global semi-conductor market in 5 years.
Driven by rapid growth of the industry, Chinese companies have started a new round international acquisition, reaching $13 billion in the recent two years. However, this new expansion draws more strictly investigation from the authorities esp. in Western countries, the total acquisition amount drops rapidly. In 2016, there are 7 cases blocked by authority censorship. Hence Chinese companies turn to product line or equity acquisition. It’s expected that in 2017, this global expansion would slow down and Chinese semi-conductor companies would face more challenges.
Investment on Wafer Fabrication and Insight
One of the key drivers of Chinese semi-conductor industry growth is increasing investment on wafer fabrication in the last ten years. According to SEMI, from 2006 to 2016, wafer fabrication investment in mainland China increased from $2.3 billion to $6.5 billion with a 180% growth, just less than $12.2 billion in Taiwan and 7.7 billion in South Korea.
It’s estimated that in 2019, China will have the largest investment on wafer fabrication. In 2017 to 2020, there will be 62 new wafer fab plants, 42% set in China. The 26 new plants will be involved with sophisticated technology and 6 of them are planned to start production in 2017. It’s expected that Chinese companies will have more fierce competition in advanced technology field with global competitors. Generally, China will play a more active and significant role in the global semiconductor industry in the near future.