© IC Insights Analysis | May 19, 2022

China-based IC production to represent 21.2% of China IC market in 2026

Foreign companies – such as Samsung, SK Hynix, TSMC and others – are expected continue to comprise more than 50% of IC production in China through 2026, says IC Insights.

A very clear distinction should be made between China’s IC market and China’s indigenous IC production. IC Insights has often stated that although China has been the largest consuming country for ICs since 2005, it does not necessarily mean that large increases in IC production within China would immediately follow, or ever follow. As shown in the table below, IC production in China represented 16.7% of its USD 186.5 billion IC market in 2021, up from 12.7% 10 years earlier in 2011.  Moreover, IC Insights forecasts that this share will increase by 4.5 percentage points from 2021 to 21.2% in 2026 (a 0.9 percentage point per-year gain on average).

Of the USD 31.2 billion worth of ICs manufactured in China last year, China-headquartered companies produced USD 12.3 billion (39.4%), accounting for only 6.6% of the country’s USD 186.5 billion IC market. TSMC, SK Hynix, Samsung, Intel, UMC, and other foreign companies that have IC wafer fabs located in China produced the rest. IC Insights estimates that of the USD 12.3 billion in ICs manufactured by China-based companies, about USD 2.7 billion was from IDMs and USD 9.6 billion was from pure-play foundries like SMIC.

If China-based IC manufacturing rises to $58.2 billion in 2026 as IC Insights forecasts, China-based IC production would still represent only 8.1% of the total forecasted 2026 worldwide IC market of USD 717.7 billion.  Even after adding a significant markup to some of the Chinese producers’ IC sales (many Chinese IC producers are foundries that sell their ICs to companies that re-sell these products to the electronic system producers), China-based IC production would still likely represent only about 10% of the global IC market in 2026.

Worldwide IC market ($ billions)$510.5
China IC market ($ billions)$186.5
China-based IC production ($ billions)$31.2
% of worldwide IC market6.1%
% of China IC market16.7%
China-HQ IC production ($ billions)$12.3
% of total China IC production39.4%
% of worldwide IC market2.4%
% of China IC market6.6%

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June 21 2022 3:19 pm V20.6.1-1