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© SEMI Analysis | September 06, 2018

China’s semi fab capacity to reach 20% worldwide share in 2020

The China IC Ecosystem Report, a comprehensive report for the IC manufacturing supply chain, reveals that front-end fab capacity in China will grow to account for 16% of the world's semiconductor fab capacity this year, a share that will increase to 20% by the end of 2020.
With the rapid growth, China will top the rest of the world in fab investment in 2020 with more than USD 20 billion in spending, driven by memory and foundry projects funded by both multinational and domestic companies, according to the new report announced today by SEMI.

The China IC Ecosystem Report, produced by SEMI, the global industry association and provider of independent electronics market research, also shows that IC Design remained the largest semiconductor sector in China for the second year in a row with USD 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 more than RMB 140 billion (USD 21.5 billion) accumulated by the National IC Fund, a critical component of the 2014 National Guideline to address China’s semiconductor trade deficit, 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 RMB 150-200 billion (USD 23.0 - USD 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.

China IC ChartOther 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% 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% CAGR during that period.

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September 21 2018 11:51 am V11.0.0-1