Do you remember what China's chip industry was like ten years ago? At that time, we always heard the saying "lack of core and soul", but who would have thought that in just a few years, the situation has changed dramatically.
Recently, a set of data caught my attention: in the first five months of 2024, China produced 170.28 billion integrated circuits, a year-on-year increase of 32.7%. What does this mean? To put it simply, an average of more than 1.1 billion chips are produced every day! Doesn't that shock you? Don't worry, there's more excitement to come. Let's take a closer look at the current situation of China's chip industry and see how this once "short board" has become the new favorite of the global market.
I remember this time last year, many people were still worried about whether China's chip industry would stagnate due to various restrictions. But reality gave us a resounding slap in the face. In May this year, China produced 35.45 billion integrated circuits, a year-on-year increase of 17.3%. This is not an accident, but an ongoing trend. Since the beginning of this year, China's chip industry has entered a period of rapid growth, especially after March, with a cumulative year-on-year growth rate of more than 30%.
Why such explosive growth, you may ask? In fact, there are many reasons behind this. First of all, the state's support for the semiconductor industry has increased. Secondly, after years of accumulation, domestic enterprises have finally made a qualitative leap in technology and management. Coupled with the restructuring of the global chip supply chain, Chinese companies have seized the opportunity to rapidly expand production capacity.
Production growth is only half the story. What's even more exciting is that Chinese chips have not only met domestic demand, but also begun to enter the international market in a big way. According to customs data, in the first five months of this year, China's chip exports increased by 21.2% year-on-year. Looking at the data in May alone, the increase is as high as 28.47%!
Interestingly, this situation has long been predicted by some foreign experts. They believe that although China may not be able to catch up with the most advanced chip technology for the time being, in the mature process of chips, China, with its huge market and cost advantages, is likely to "crazy roll" in the next few years, causing a huge impact on chip manufacturers in Europe, America, Japan and South Korea.
The chip industry has a characteristic, that is, large investment and long cycle. If you want to expand production capacity, you can't just talk about it, you have to invest real money. In this regard, China can be said to have made a bloody investment.
According to the latest data released by SEMI and SEJA, in the first quarter of 2024, the semiconductor equipment market in Chinese mainland reached $12.52 billion, a year-on-year increase of 113%! This figure accounts for nearly half of global semiconductor equipment sales. What's even more surprising is that China has been the world's largest semiconductor equipment market for four consecutive quarters.
On the other hand, other traditional semiconductor powers, such as Taiwan, Japan, South Korea and the United States, are shrinking their semiconductor equipment markets. What does this mean? It shows that in the global chip industry, only Chinese mainland is still maintaining rapid growth.
In the current complex international situation, many industries are facing the challenge of "de-globalization". However, what is interesting is that China's chip industry has bucked the trend in this environment, showing a strong momentum of development.
Why is this happening? I think there are several reasons for this:
1. China has a huge domestic demand market, which provides a stable demand base for the chip industry.
2. Years of technology accumulation and personnel training have begun to show results.
3. The policy support of the state and the bold investment of enterprises have formed a virtuous circle.
Finally, the restructuring of the global supply chain has given new opportunities to Chinese companies.
Future outlook: opportunities and challenges coexist
Seeing this, you may feel that the future of China's chip industry is bright. But I would say that we still have a lot of challenges.
In the field of high-end chips, there is still a certain gap between us and the international top level. Although great progress has been made in mature processes, we still need to continue to work on the most cutting-edge technology. Second, the chip industry is a global industry, and over-reliance on a single market or supply chain is risky. We need to maintain independent innovation while deeply integrating with the global industrial chain. Similarly, human resource development and basic research are areas that we need to invest in for a long time. The chip industry is a typical knowledge-intensive industry, and it is difficult to maintain long-term competitiveness without continuous talent supply and basic research breakthroughs.
In general, China's chip industry is in a historic period of opportunity. We have achieved "corner overtaking" in some areas, but there is still a long way to go before we can truly become a frontrunner in the global semiconductor industry. However, seeing these exciting data, I believe that as long as we insist on innovation and maintain an open and cooperative attitude, the future of China's chip industry will be brighter!
How do you see the future prospects of China's chip industry? Feel free to leave a message in the comment area.