China's integrated circuit (IC) industry is currently facing three major opportunities. First, since 2010, global semiconductor sales and investment have entered a new phase of high growth. Second, despite its rapid development, China's IC industry still heavily relies on foreign imports, making the need for localization more urgent than ever. Third, the Chinese government has established a large fund to focus on supporting the IC sector, signaling strong policy backing. At this critical time, it is recommended that all types of capital increase their investments in the IC industry. By combining industry and finance, we can promote coordinated development across the entire industrial chain and build a robust support system for upstream and downstream players, ultimately enabling the leapfrog development of China's IC industry.
In 2017, China’s IC market saw significant growth. Global semiconductor sales reached $408.7 billion, up 20.6% year-on-year, with the IC sector contributing $340.2 billion. In China, the IC industry generated sales of 535.52 billion yuan, reflecting a 23.5% year-on-year increase. The design, manufacturing, and packaging & testing segments grew by 24.7%, 29.1%, and 18.3%, respectively, highlighting the industry's broad-based expansion.
However, the import dependence remains high. In 2017, China imported ICs worth $260.14 billion, while exports totaled only $66.88 billion, resulting in a massive trade deficit of $193.26 billion. This underscores the urgency for domestic production and innovation in the sector.
The government has also played a crucial role. The 19th National Congress emphasized building a network power and digital China, while the 2018 government work report highlighted the importance of the IC industry as a key pillar of the real economy. Local governments are also investing heavily, with cities like Beijing, Shanghai, Shenzhen, and Chengdu leading the way. These efforts aim to create a favorable environment for R&D, talent development, and infrastructure.
Looking ahead, China aims to close the gap with global leaders by 2020 and reach international standards by 2030. Key areas of focus include design, manufacturing, advanced packaging, equipment, and materials. Emerging trends such as AI, IoT, 5G, and cloud computing will drive demand for next-generation chips, including CPUs, FPGAs, and MEMS sensors.
In 2017, China's electronics manufacturing industry achieved sales revenue of 14 trillion yuan, growing at 14%—a significant boost compared to other sectors. This growth reflects the rising demand for semiconductors across various industries.
The National Fund, established to support the IC industry, had invested in 49 enterprises by 2017, committing over 118.8 billion yuan to 67 projects. Its impact spans the entire supply chain, from design to manufacturing and materials. Notably, several companies listed on major exchanges, showing the fund’s success in fostering growth and innovation.
In conclusion, the integration of industry and finance is essential for accelerating the development of China’s IC sector. With continued investment and strategic collaboration, the industry can achieve sustainable and rapid progress, reducing reliance on foreign technology and strengthening national technological sovereignty.
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