China's Semiconductor Industry to Grow to 300 Trillion Won by 2025... Doubled in 5 Years

[Asia Economy Reporter Jeong Hyunjin] Amid the fierce global semiconductor hegemony war, China's semiconductor industry is rapidly growing, with projections that its revenue scale will exceed $250 billion (approximately 300 trillion KRW) by 2025.

According to the Semiconductor Equipment and Materials International (SEMI) and the China Semiconductor Industry Association (CSIA) on the 2nd, China's semiconductor industry revenue is expected to grow more than twice from $128 billion last year to $257 billion in 2025. This figure encompasses the revenue generated during the distribution process of semiconductors developed and produced by local companies within China.

SEMI emphasized that China's average annual semiconductor revenue growth rate will reach 15% from 2020 to 2025. Before the 2000s, China’s semiconductor industry was virtually non-existent, but since 2001, it has made aggressive investments, with the market growing at an average annual rate of 26% from 2001 to 2013 and 17% from 2015 to 2020.

(Source: Semiconductor Equipment and Materials International (SEMI))

SEMI stated, "The scale of China's semiconductor industry was less than $10 billion in 2001 but grew to $128 billion by 2020," adding, "From this year onward, over the next five years, the revenue expansion will be twice as large as the growth seen in the past 20 years," forecasting rapid growth.

China is expected to expand its influence in the global semiconductor market, led by chip design (IC design) and foundry sectors. SEMI analyzed, "In the largest design sector of China's semiconductor industry, startups in various fields such as automotive, cryptocurrency mining, Internet of Things (IoT), and artificial intelligence (AI) are continuously developing new products."

In the production sector, China is aggressively expanding factory construction, with its semiconductor wafer equipment market share surging from 9% in 2010 to 17% last year. SMIC, China’s largest foundry company, ranked 5th in the global market with a 5.3% revenue share as of the second quarter. SEMI also estimated that the analog, power, and foundry sectors will grow at an average annual rate of 13% from 2020 to 2023.

According to SEMI, China's semiconductor equipment investment surged from $13 billion in 2018 to $18 billion last year. Last year, China surpassed Taiwan, South Korea, and Japan to become the world's largest annual semiconductor equipment investor for the first time. In the second quarter of this year, China invested $8.22 billion in semiconductor equipment, exceeding the investment scale of South Korea, Taiwan, and North America.

Kim Shin, a SEMI researcher in charge of China, analyzed, "Chinese semiconductor manufacturers have entered a new era of growth, supported by massive funding, a strong domestic market, and their own hyperscale platform companies, reaching a position capable of global competition," adding, "Although China and the United States are fiercely competing in technology and semiconductor leadership recently, continuous pressure has rather fostered the semiconductor industry's development and strengthened China's determination to build a reliable supply chain."