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China’s Semiconductor Fab Capacity to Reach 20% Worldwide Share in 2020

Published: Sep 06,2018

The China IC Ecosystem Report, a comprehensive report for the IC manufacturing supply chain, reveals that front-end fab capacity in China will grow to account for 16 percent of the world's semiconductor fab capacity this year, a share that will increase to 20 percent 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 $20 billion in spending, driven by memory and foundry projects funded by both multinational and domestic companies, according to the new report announced today by SEMI.

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The China IC Ecosystem Report, produced by SEMI, the global industry association and provider of independent electronics market research, also shows that IC Design remained the largest semiconductor sector in China for the second year in a row with $31.9 billion in revenue in 2017, widening its lead over the long-dominant IC Packaging and Test sector.

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.

The more than RMB140 billion (US$21.5 billion) accumulated by the 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. Semiconductors are China’s largest import by revenue. Phase 2 of funding aims to raise another RMB150-200 billion ($23.0-$30.0 billion).

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, the report shows.

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