China's integrated circuit (IC) industry is currently facing three major opportunities that could drive its rapid development. First, since 2010, global semiconductor sales and investment have entered a new phase of high growth, with the market showing strong momentum. Second, China’s IC industry still relies heavily on foreign imports, making the need for domestic localization more urgent than ever. Third, the government has established a large national fund to focus specifically on the IC sector, signaling strong policy support. At this stage, it is recommended that all types of capital increase their investments in the IC industry. By combining industrial and financial resources, the entire supply chain can develop in a coordinated manner, forming a robust ecosystem that supports both upstream and downstream sectors, ultimately enabling the leapfrog development of the IC industry.
In 2017, the Chinese IC industry experienced significant growth. Globally, semiconductor sales reached $408.7 billion, up 20.6% year-on-year, with the IC segment reaching $340.2 billion. In China, the IC industry generated sales of 535.52 billion yuan, a 23.5% increase compared to the previous year. The design, manufacturing, and packaging/testing segments grew by 24.7%, 29.1%, and 18.3%, respectively, highlighting the industry's broad-based expansion.
Despite this growth, China remains highly dependent on imported ICs. In 2017, the import value of ICs reached $260.14 billion, while exports were only $66.88 billion, resulting in a trade deficit of $193.26 billion. This highlights the critical need for local production capabilities and technological self-reliance.
The government has been actively supporting the IC industry through various policies. The 19th National Congress emphasized building a digital China and a smart society, while the 2018 government work report placed ICs at the forefront of the real economy. The Ministry of Industry and Information Technology also called for deeper integration of the Internet, big data, and artificial intelligence with traditional industries, further reinforcing the strategic importance of the IC sector.
At the regional level, cities like Beijing, Shanghai, Shenzhen, and Wuhan have become key players in IC development, while emerging regions such as Fujian, Hefei, and Chengdu are also investing heavily in policy, funding, and talent. These efforts reflect a nationwide push to strengthen the IC industry.
According to the "National Integrated Circuit Industry Development Promotion Outline," China aims to reach sales of over 350 billion yuan by 2015, exceed 20% annual growth by 2020, and achieve international standards by 2030. The main tasks include advancing design, manufacturing, packaging, equipment, and materials.
New trends in the semiconductor industry include cloud computing, IoT, big data, 5G, and AI. These areas are expected to drive demand for advanced chips such as CPUs, FPGAs, and MEMS sensors. Additionally, compound semiconductors like GaN and SiC are gaining attention as future core technologies.
In 2017, China's electronic information manufacturing industry achieved sales revenue of 14 trillion yuan, growing by 14%. This reflects the increasing demand for chips across various sectors. The national IC fund has also made significant progress, having invested in 49 companies and allocated 81.8 billion yuan by the end of 2017, with plans to expand further.
To accelerate development, it is essential to enhance collaboration between industry and finance, ensuring long-term investment and sustainable growth. Strengthening international partnerships and fostering innovation will be crucial for China to compete globally.
Overall, the IC industry represents a strategic pillar for China’s economic transformation. With continued investment, policy support, and technological advancement, the industry is well-positioned to achieve sustained growth and global competitiveness.
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