The FFU Market is Shifting Continents
China is an emerging workhorse in the area of integrated circuit (IC) production, so much so that the country set self-sufficiency goals that it hoped to hit by 2025. However, according to Semiconductor Digest, the country is now projected to fall far short of those goals. In turn, that may pave the way for foreign competitors to continue to dominate IC production.
Background on China and Integrated Circuits
Some background information is helpful when it comes to understanding China’s role in the production of integrated circuits. According to Davis, ever since 2005, “China has been the largest consuming market for ICs.” For quite some time, the country has been the home of a robust IC market, valued at $125 billion in 2019. Production, though, is a different story.
Production in China itself made up 15.7% of that market; however, that was only a modest increase over the figure of 15.1% from 2014. All in all, in 2019, ICs totaling $19.5 billion in value were manufactured in China. Only 38.7%, or $7.6 billion, came from companies headquartered in China, though. Foreign companies like Samsung and Intel were responsible for the rest of the production.
Projections of Chinese Production Growth
IC Insights writes that the next few years look relatively strong for Chinese IC production, with manufacturing rising to $43 billion by 2024. However, that would still be a relatively small share of the world’s overall IC market, valued at $507.5 billion.
China does have a strong projected compound annual growth rate of 17% from 2019 to 2024, though that probably won’t be enough for the country to meet the goal of self-sufficiency in the IC market. There are a couple of reasons for this. For one, the country is starting from a less advanced point than its competitors. Additionally, Changxin Memory Technologies, which is China’s first home-grown DRAM supplier, did not begin DRAM production until the fourth quarter of 2019. Production of many components is lagging in China as well.
What It Means for Other Companies
China is exhibiting some promising growth, but given its starting point and resources, it is a long way from self-sufficiency. As such, it is very likely that non-Chinese companies will continue to dominate the market for quite some time.
Semiconductor FFU Market Forecasts
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