Asian Edge: The role of Chinese IC designers in worldwide supply chain

Colley Hwang, DIGITIMES, Taipei 0

Within China's semiconductor industry, the IC design sector actually achieved the most progress in 2018. But how big exactly is China's IC design industry? There have been many versions of the story.

According to IC Insights' figures, the global IC design industry had a scale of US$109.5 billion in 2018. Of the annual orders of US$57.73 billion for foundries, 18.5% came from China-based clients. Judging from the proportion, we can assume that China's IC design industry had a scale of US$20.2 billion in 2018, a level similar to that of Taiwan, but higher than those of Japan and South Korea.

Orders for foundry services from China also went up sharply by 41% on year from 2017's US$7.57 billion to US$10.69 billion in 2018.

TSMC also saw its orders from China-based clients rise dramatically from 2017's US$3.7 billion to 2018's US$6 billion, up 61% on year. Although TSMC did not process all these orders at its fabs in China, China's IC design houses saw their combined contribution to the worldwide foundry market rise from 2017's 13.8% to 2018's 18.5%, an impressive growth providing key incentives for many to invest in China's foundry sector.

(Note: This is part of a series of articles by Digitimes president Colley Hwang on the latest developments of the IT industry in the wake of the US-China trade war.)

Colley Hwang, president of DIGITIMES Asia, is a tech industry analyst with more than three decades of experience under his belt. He has written several books about the trends and developments of the tech industry, including Asian Edge: On the Frontline of the ICT World published in 2019, and Disconnected ICT Supply Chain: New Power Plays Unfolding published in 2020.