preface
In this digital age, there is a set of numbers that are quietly changing the pattern of the world. They are not the rise and fall of the stock market, not the growth of GDP, but the most direct manifestation of a country's scientific and technological strength. Behind these numbers, there is an amazing story of rise.
Have you ever wondered how a small piece of silicon can power the global economy? Or how did a country that was once considered the "factory of the world" make the leap from follower to leader in just a few years?
A staggering set of numbers
In the wave of science and technology, there is a set of numbers that are quietly rewriting the history of China's semiconductor industry. In August 2024, China's chip production reached a staggering 37.29 billion chips. What does this number mean? Imagine if these chips were spread out to cover an area of nearly 200 football fields. What's even more remarkable is that this output increased by 17.8% over the same period last year, showing the vigorous vitality of China's semiconductor industry.
However, this is only the tip of the iceberg. When we extend our horizons to the first eight months of 2024, the cumulative production has reached a staggering 284.51 billion pieces. That's the equivalent of 36 chips for everyone on the planet. Behind such a huge number is the unremitting efforts of countless engineers day and night, and the result of the 24-hour non-stop operation of each fab.
Some of these chips may be running in your smartphone, some may be driving intelligent transportation systems on the streets, and some may be paving the way for the quantum computers of the future. They are small and delicate, but they carry the heavy responsibility of moving the whole society forward.
From 170.48 billion in 2022, to 235.43 billion in 2023, and then to 284.51 billion today, China's chip industry is running forward at an astonishing speed. This begs the question, what kind of forces are driving all this? And what are the stories hidden behind these cold numbers?
The three pillars behind the numbers
Behind these astonishing figures, there are three pillars of the rise of China's semiconductor industry. First of all, the attention at the national strategic level has injected a boost into the development of the industry. Since May 2023, a series of supportive policies have moistened this fertile soil like timely rain. From tax incentives to R&D subsidies, the government's strong support provides a solid backing for enterprise innovation.
Secondly, the companies represented by SMIC are staging an epic of struggle. They are not afraid of difficulties and have the courage to invest. In the first half of 2024, Chinese companies bought nearly half of the world's semiconductor equipment, a feat that shocked the entire industry. SMIC has increased its production capacity at an astonishing rate, with an average daily production capacity of nearly 6 billion pieces, and is striving to achieve the goal of achieving an annual production capacity of 1,000 billion pieces by the end of 2025.
Finally, the strong market demand provides a steady stream of impetus for the development of the industry. The domestic market has a growing thirst for chips, and chips made in China are making a big difference in everything from smartphones to automotive electronics. What's even more exciting is that Chinese chips are moving onto the world stage. From January to August 2024, the export value of chips will reach 736.04 billion yuan, a year-on-year increase of 24.8%, even exceeding the export value of automobiles, becoming a new export star.
However, in this thriving scene, we can't help but ask: in the face of such a rapid development momentum, has China's semiconductor industry become one of the world's leading ranks? In the field of high-end chips, how far is the gap between us and the world's top level?
From "Chaser" to "Frontrunner"
China's semiconductor industry is staging a gorgeous transformation from a "catch-up" to a "leader". In the field of mature technology, Chinese companies have shown amazing strength. In the first half of 2024, the number of mature process chips produced in China will reach 251.92 billion, a year-on-year increase of 32.3%, which not only greatly improves production capacity, but also has internationally recognized quality.
This strength is being fully demonstrated in the international market. The surge in China's chip exports is remarkable, with the export value from January to August 2024 reaching 736.04 billion yuan, a year-on-year increase of 24.8%. This figure not only exceeds the total export volume for the whole of 2023, but also surpasses the traditional export strength of automobiles and becomes a new export star.
In the global market structure, China's chip industry is gradually moving from the periphery to the center stage. SMIC has surpassed UMC and GF to become the world's second-largest foundry. China's IC design market will reach 140 billion yuan in 2023 and is expected to exceed 200 billion yuan in 2024, showing a strong growth momentum.
However, in this jubilant atmosphere, we can't help but ask: in the field of high-end chips, how far is there still a gap between China and the world's leading level? How can we achieve breakthroughs in advanced processes?
Challenges and opportunities coexist
While China's semiconductor industry is booming, challenges and opportunities are always there. The most significant technical bottleneck is the gap in advanced manufacturing processes. China accounts for only about 3% of global chip production in sub-16nm process nodes. Although SMIC has ranked among the top five in the world, there is still a significant gap in advanced processes such as 5nm compared with giants such as TSMC.
The talent gap is also a thorny issue. The semiconductor industry is a typical talent-intensive industry, and the thirst for high-end talents is overwhelming. Nurturing local talent and attracting overseas elites has become a priority, but it will take time and sustained investment.
The complexity of the international environment has brought additional challenges to China's chip industry. Trade restrictions and technological blockades are like a double-edged sword, restricting Chinese companies' access to advanced equipment and technology on the one hand, and inspiring the determination to innovate independently.
In the face of these challenges, how should China's semiconductor industry respond? Can we turn these challenges into a driving force for industrial upgrading? Finding a breakthrough in the face of adversity may be the key to the next stage of development of China's chip industry.
The core road is long, and the struggle is not endless
Looking ahead, the road to China's semiconductor industry is long, but it is full of hope. Independent innovation is undoubtedly the core of breakthroughs in key technologies. Domestic chip companies are increasing R&D investment, such as SMIC, GF and other companies will invest nearly 20 billion yuan in R&D in the first half of 2024. These efforts are gradually narrowing the gap with the international advanced level and paving the way for technological breakthroughs.
The coordinated development of the industrial chain is also an indispensable part. From IC design to wafer fabrication to packaging and testing, China is building a complete and robust semiconductor ecosystem. In 2024, the scale of China's IC design market is expected to exceed 200 billion yuan, showing the vigorous vitality of the upstream of the industrial chain.
At the same time, international cooperation remains an important support for the development of China's semiconductor industry. Despite some constraints, the concept of openness, win-win, and mutual benefit still guides the industry forward. Chinese companies are seeking in-depth cooperation with global partners to jointly promote technological innovation and market development.
On this road full of challenges and opportunities, how will China's semiconductor industry balance independent innovation and international cooperation? Can we find a unique path in the face of fierce global competition?
epilogue
Innosilicon China, intelligent creation of the future. The rise of China's semiconductor industry is like a passionate symphony, which is playing on the world stage. From the monthly output of 37.29 billion pieces to the export value of 736.04 billion yuan, every figure is a strong proof of China's scientific and technological strength. The rise of SMIC and the vigorous development of the IC design market all demonstrate China's increasingly important position in the global semiconductor landscape.
However, this is only the prelude. The future chapter is even more magnificent. On the road of independent innovation, China is accelerating; In the industrial chain collaboration, a complete semiconductor ecosystem is taking shape; On the stage of international cooperation, Chinese enterprises are embracing global partners with an open attitude.
Challenges and opportunities coexist, difficulties and hopes coexist. Technological bottlenecks need to be broken through, talent gaps need to be filled urgently, and the international environment is complex and changeable. But it is precisely these challenges that have stimulated the innovative vitality and enterprising spirit of China's semiconductor industry.
Standing at a new starting point, China's semiconductor industry is moving towards a broader future with a high-spirited attitude. Innosilicon China is not only a slogan, but also a grand blueprint that is being realized. In this fertile land full of opportunities, China is writing its own legend of the "core" era.