China IC Market Driven Substantially by IC Design Sector

Published Date : Sep 16, 2015

Globally, China is known for its robust growth in the IC industry. The integrated circuit industry of China is market with presence of several strong domestic players. These players provide ICs to several end-use industries around the world. The IC industry in China has demonstrated strong growth in the past decade. Furthermore, the rising innovation in this industry has attracted a lot of foreign investment.

Another trend that the China integrated circuit industry is marked with is growing mergers and acquisitions. These M&As has helped drive innovation in the China IC industry and fueled the revenue generation of this market. Furthermore, the acquisition or mergers with other small firms has helped to share intelligence with the domestic IC industries in China due to which China has emerged as one of the leading market in the global IC market.

According to the China Semiconductor Association, the Chinese IC industry was worth US$12.5 billion last year. Furthermore, out of this figure a substantial amount that is US$5 billion was generated by the IC design sector only. On the other hand, the sectors such as IC fabrication contributed to the China IC market a total of US$3.7 billion, while the sector of IC packaging and testing contributed a total of US$3.8 billion.

The amount of investment by China in the memory industry was also high and amounted to US$10 billion as China is the biggest memory market in the world and buys a massive amount of 75% memory in the globe. A majority of the China IC design firms depend on the state-owned enterprises and there are almost negligible independent integrated circuit design firms in existence.

Some examples of this include – Nari Smart-chip Microelectronics is currently a subsidiary of the State Grid and provides main products such as smart meter ICs and has a monopoly in this sector, and another example is that of the company CEC Huada, which is China Electronics Corporation and monopolizes the IC market sector of ID card use.