The different sectors of the semiconductor industry are clearly defined with specific work, and therefore each sector's self-sufficiency rate must be looked at in their own right. The meaning of "Made in China" would mean little if seen in a confusing perspective. Lumping together the production values of IC design, manufacturing, and packaging and testing can only provide a clue to the entire scale of the semiconductor industry, not to its self-sufficiency.
According to IC Insights' numbers, the production value of wafer manufacturing at fabs in China - including those run by local and foreign investors - was US$23.7 billion in 2018. Compared to the worldwide semiconductor market's amount of US$430.8 billion, China's semiconductor industry only had a global market share of 5.5%. Compared to China's overall demand for semiconductor of US$251.1 billion, the local production accounted for only 9.4%. But if only demand from local players such as Huawei, Lenovo and Xiaomi is taken into consideration, the local production's contribution will rise to 15.2%.
As the government of China has been aggressively pushing its semiconductor development, the local industry's production value is expected to rise to US$47 billion by 2023 if no major external influences get involved. Compared to the worldwide semiconductor industry's US$571.4 billion, China's share will pick up to 8.23%. However, the research firm indicates that the growths will be driven by Wuhan Xinxin Semiconductor Manufacturing as well as companies in the "Others" section in its findings, and it does not mention how the US-China trade tensions could affect China's semiconductor industry, which suggests that the outcome is still unpredictable.
As for China's Made in China 2025 project, which sets the goal of achieving a self-sufficiency manufacturing rate of 40% by 2020 for its semiconductor industry and 70% by 2025, it would be rather difficult to accomplish judging from the current developments.
(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.)
