IC production in China represented 15.7% of its US$125 billion IC market in 2019, up only slightly from 15.1% five years earlier in 2014, according to IC Insights. The share is forecast to increase by 5pp to 20.7% in 2024, said the research firm.
IC Insights indicated a very clear distinction should be made between China's IC market and indigenous IC production in China. The research firm reiterated that although China has been the largest consuming market for ICs since 2005, it does not necessarily mean that large increases in IC production within China would immediately follow or ever follow.
Of the US$19.5 billion worth of ICs manufactured in China during 2019, China-headquartered companies produced only US$7.6 billion (38.7%), accounting for only 6.1% of the country's US$124.6 billion IC market, IC Insights noted. TSMC, SK Hynix, Samsung, Intel and other foreign companies that have IC wafer fabs located in China produced the rest.
Of the US$7.6 billion in ICs manufactured by China-based companies last year, about US$1.8 billion was from IDMs and US$5.8 billion was from foundries like SMIC, IC Insights disclosed.
If China-based IC manufacturing rises to US$43.0 billion in 2024 as IC Insights forecasts, China-based IC production would still represent only 8.5% of the total forecast 2024 worldwide IC market of US$507.5 billion, the research firm indicated. Even after adding a significant markup to some of the Chinese foundry producers' IC sales, China-based IC production is still likely represent only about 10% of the global IC market in 2024, according to IC Insights.