China, the world's leading consumer of semiconductors, is undergoing a third semiconductor shift in tandem with the development of 5G, consumer electronics, and AI. Owing to the shift of the semiconductor industry – growing downstream demand, and strong support from the government, China's IC design industry has grown rapidly in recent years.
China's IC design industry has remained active in recent years, with the number of related companies continuing to rise. The following statistics from the ICCAD showed the number of IC design companies in China reached 2,810 in 2021, compared to 2,218 in 2020, a 26.7% increase. It is worth noting there were only 1,780 local IC design companies in 2019, showing significant growth in the last two years. (To have a complete understanding of the major player in the IC design industry in China, please download the full report of "DIGITIMES' Top 10 public listed IC design houses in China.")
In addition to the traditional IC design industry hubs of Beijing, Shanghai, and Shenzhen, there are more than 100 design companies in each of the following cities: Wuxi, Hangzhou, Xian, Chengdu, Nanjing, Wuhan, Suzhou, Hefei, and Xiamen. Based on this, the number of design companies in China will continue to increase and the cluster effect in the industry is poised to become more obvious.
In terms of size, 413 IC design companies were expected to see sales exceed CNY100 million in 2021, compared to 289 companies in 2020, for an increase of 42.9%. Sales for these 413 companies amounted to CNY328.8 billion in 2021, up from CNY305 billion the year before, accounting for 71.7% of overall industry sales.
Credit: DIGITIMES
On the other hand, the active capital market has also been an important factor in the development of China's semiconductor industry. In the wake of rapid industry development, attention to semiconductor companies by the capital market has intensified and the semiconductor companies' performance in the capital market has also surpassed other companies. Ever since the Shanghai Stock Exchange Science and Technology Innovation Board (STAR Market) was established, the semiconductor capital market has flourished, becoming a sort of "national movement" to watch in China.
A total of seven Chinese IC design companies were listed on the STAR Market in 2021, which raised a total of CNY12.1 billion. As of December 1, 2021, these companies had a total combined market value of CNY223 billion. There are currently 42 IC design companies listed among the Main Board, SME Board, ChiNext, and STAR Market, which have raised a total of nearly CNY44.7 billion and have an accumulated market value of CNY1.8 trillion.
In comparison, only 35 IC design companies were listed on the Main Board, SME Board, ChiNext, and STAR Market in 2020 raising a total of roughly CNY29.2 billion.
Chinese IC design companies currently cover consumer electronics, telecommunications, computer, simulation, power, and smart card applications. Consumer electronics and telecom are the two leading revenue segments for Chinese IC design companies, with sales amounting to CNY206.6 billion and CNY103 billion, respectively, in 2021.
In the future, the semiconductor industry growth will rely more on chips for electric vehicles (EV), 5G mobile phones, the Internet of Things (IoT), and AI. There is a huge demand in China's IC application market and electronic machine industry, pushing the rapid growth of China's IC design industry.
Editor note:
DIGITIMES Asia selected the 10 IC design houses in China, based on their sales revenue, the net profit margin in 2020, and company revenue per employee, in a recent report of "Top 10 public listed IC design houses in China," in which DIGITIMES Asia will address the development of these top 10 companies and outline their road to success in the market. The report is exclusively for DIGITIMES' registered members.
