Front-end fab capacity in China will grow to account for 16% of the world's semiconductor fab capacity in 2018, according to SEMI. The share will increase to 20% by the end of 2020.

With the rapid growth, China will top the rest of the world in fab investment in 2020 with more than US$20 billion in spending, driven by memory and foundry projects funded by both multinational and domestic companies, SEMI indicated.

IC design remained the largest semiconductor sector in China for the second year in a row with US$31.9 billion in revenues in 2017, widening its lead over the long-dominant IC packaging and test sector, SEMI noted. The ascent of China's IC design sector comes as the region's equipment market is expected to claim the top spot in 2020 for the first time on the strength of the continuing development of its domestic manufacturing capability. China's maturing domestic fab sector is also benefiting domestic equipment and materials suppliers. Both groups continue to see gains in their product offerings and capabilities, particularly in silicon wafer production, SEMI continued.

The more than CNY140 billion (US$21.5 billion) accumulated by China's National IC Fund, a critical component of the 2014 National Guideline to address China's semiconductor trade deficit, has spurred rapid gains throughout the region's IC supply chain, SEMI said. Semiconductors are China's largest import by revenue. Phase 2 of funding aims to raise another CNY150-200 billion, according to SEMI.

Encouraged by the National Guideline and favorable policies, skilled overseas talent is returning to China, triggering an explosion of domestic IC design start-ups that are benefiting from access to investment and favorable policies, SEMI observed.

In addition, SEMI noted there are 25 new fab construction projects underway or planned in China. Foundry, DRAM and 3D NAND are the leading segments for fab investment and new capacity in China.

China's IC packaging and test industry is also moving up the value chain by enhancing its technology offerings through mergers and acquisitions and building advanced capabilities to entice international IDMs, SEMI said. Meanwhile, China's IC materials market is expected to grow at a 10% CAGR from 2015 to 2019, driven primarily by the region's new fab capacity ramp in the coming years, SEMI indicated.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved