[Semicon Korea 2018 project]
It is expected that Chinese semiconductor front-end production facilities will account for 20 percent of the global market between 2020 and 2021. It will be a significant jump from the current market share of 16%. It will be the result of the Chinese government's policy of launching semiconductors. With China launching new plant projects and expanding production facilities, sales at pre-fab of the overall process from 2015 to 2021 are expected to grow at a CAGR of 14%.
According to the China IC Ecosystem Report released by the Semiconductor Equipment and Materials International (SEMI), there are 25 new fab construction projects currently underway or planned in China. Seventeen 300mm fabs are being invested in and expanded by the Chinese government's National IC Industry Investment Fund. Foundries, DRAM, and 3D NAND are being built in China.
In 2014, the Chinese government introduced national guidelines for semiconductor manufacturing in order to invest in the semiconductor industry and expand production facilities. At that time, the National IC Industry Investment Fund was established. The amount of money collected is more than 140 billion yuan (about 22.8 trillion won). It is estimated that the fund contributed greatly to the rapid growth of the Chinese semiconductor supply chain.
At the end of 2017, another IC fund was announced. It is said that the goal is to collect an additional 150 to 200 billion yuan (about 24.4 trillion to 32.6 trillion won). The second phase key investment areas are semiconductor design, memory, compound semiconductors and other strategic goals. Smart cars, smart grids, artificial intelligence (AI), Internet of Things(IoT), and 5G communications are included.
China's largest semiconductor industry is semiconductor design. Semiconductor design sales in 2017 reached $ 31.9 billion (about 35.7 trillion won), ranking first for two consecutive years. HiSilicon and Unisoc (formerly Spreadtrum), both China's leading semiconductor design companies, are among the world's top 10 fabless in 2017. However, most of the 1,380 Chinese semiconductor design firms are small businesses with sales of less than $ 1 million (about 1.1 billion won). SEMI said that new growth in cryptocurrency and AI applications show that growth potential in China is enormous.
In the first place, China had the largest sales in the semiconductor packaging and inspection market until 2015. But in 2016, sales in the semiconductor design sector surpassed this figure. In 2017, sales are estimated to be $ 29 billion (about 32.4 trillion won). The world-class Integrated Device Manufacturer (IDM) and the Outsourced Semiconductor Assembly and Test (OSAT) have more than one production facility in China.
The semiconductor material market is also growing. In 2017, the companies achieved sales of $ 7.6 billion, accounting for 16% (second largest) of the global semiconductor materials market share. Although the packaging materials market is currently larger than the wafer fab materials (WFM) market, the fab materials market is growing rapidly, and the packaging material market is expected to surpass the market within the next few years.
The semiconductor equipment market is also growing. In 2018, sales are estimated at $ 12.82 billion, accounting for 20.6 percent of the global equipment market. It is second only to Korea. The Chinese equipment market has a lot of new projects to be announced, so the growth rate is higher than other countries. In 2018, it grew by 55.7% from the previous year. Chinese equipment suppliers are recognized for quality in most of their fabs, but their local market share is around 5%. Semiconductor production in China grew at an average annual rate of 20% between 2007 and 2017, but the demand is still much higher than domestic fab manufacturing facilities. Semiconductors are China's largest import as a single item. It has created a huge trade deficit, and the Chinese government is accepting it sensitively.
The total sales of the semiconductor industry in China was less than $ 20 billion in 2007 but has surpassed $ 60 billion in 2016 and $ 80 billion in 2017. SEMI's China Semiconductor Ecosystem Report was surveyed over a four-month period, beginning in May 2018 and ending August 2018. The data for 2017 is composed of actual numbers, and 2018 is an estimate.