A decade of unprecented growth: China's impact on the semiconductor industry - 2014 update

Aug 2014

China's growth continued to far exceed worldwide semiconductor market growth for a third consecutive year in 2013. While the worldwide semiconductor market increased 4.8% in 2013, China's semiconductor consumption market grew by 10.1% in 2013 to reach a new record of 55.6% of the global market.

The story is similar in terms of the industry. China's reported 2013 semiconductor industry growth continued to exceed both China's semiconductor consumption growth and the worldwide semiconductor market growth. During 2013 China's semiconductor industry grew by 16.7% to reach a record US$65.8bn. From 2003 through 2013, China's semiconductor industry has achieved a ten-year compound annual growth rate of 23% (measured in US dollars). During this same period, China's semiconductor consumption achieve a 19.4% compound annual growth rate while the worldwide semiconductor market had a 6.3% compound annual growth rate (both measured in US dollars).

China's exceptional relative semiconductor performance in 2013 remains evident in the continuing growth of its IC consumption/production gap. The gap is the difference between IC consumption and IC industry revenues and has now grown to a record US$108.2bn. Over the near term, China's IC consumption/production gap continues to represent an unparalleled market opportunity. The question remains how will it be filled: with continued transfer and expansion from multinational companies or the emergence and growth of significant Chinese companies?