China will top the rest of the world in fab investment in 2020 with more than $20 billion in spending, driven by memory and foundry projects funded by both multinational and domestic companies.
SEMI’s China IC Ecosystem Report shows that IC design remained the largest semiconductor sector in China for the second year in a row with $31.9 billion in revenue in 2017, widening its lead over the long-dominant IC Packaging and Test sector.
The ascent of China’s IC Design sector comes as the region’s equipment market is expected to claim the top spot in 2020 for the first time on the strength of the continuing development of its domestic manufacturing capability.
China’s maturing domestic fab sector is also benefiting domestic equipment and materials suppliers. Both groups continue to see gains in their product offerings and capabilities, particularly in silicon wafer production.
The $21.5 billion plus funds accumulated by the National IC Fund has spurred rapid gains throughout the region’s IC supply chain. Semiconductors are China’s largest import by revenue.
Phase 2 of funding aims to raise another $23.0-$30.0 billion.
Encouraged by the National Guideline and favorable policies, skilled overseas talent is returning to China, triggering an explosion of domestic IC Design start-ups that are benefiting from access to investment and favorable policies, the report shows.
Other highlights from The China IC Ecosystem Report include:
- Currently 25 new fab construction projects are underway or planned in China. 17 – 300 mm fabs are being tracked as part of this investment and expansion activity. Foundry, DRAM and 3D NAND are the leading segments for fab investment and new capacity in China.
- China’s IC Packaging and Test industry is also moving up the value chain by enhancing its technology offerings through mergers and acquisitions and building advanced capabilities to entice international integrated device manufacturers.
- China’s IC materials market, currently dominated by Packaging materials, became the second largest regional market for materials in 2016, a position it solidified in 2017. China’s materials market is expected to grow at a 10 percent CAGR from 2015 to 2019, driven primarily by the region’s new fab capacity ramp in the coming years. Fab capacity will expand at a 14 percent CAGR during that period.
