In 2014, the Chinese government described new semiconductor industry programs that will utilize investment by both the Chinese national government ($19.5 billion) and local government and private equity investors ($97.4 billion). IC Insights believes that these outlays have to potential to significantly change the future IC supplier landscape.

As Chinese IC design houses continue to advance, IC Insights expects an increasing number of China-headquartered companies to move up in the ranking of top fabless IC suppliers. As shown in Figure 1, there were nine Chinese companies among the top-50 fabless companies in 2014 as compared to only one company in 2009.

In total, the Chinese fabless IC suppliers held 8% of the top 50 fabless IC market ($80.5 billion) in 2014 and currently hold twice as much top 50 fabless IC marketshare as the European and Japanese companies combined.

Nineteen U.S. companies were represented among the top 50 fabless suppliers in 2014, and they accounted for 64% of the total top 50 fabless company IC sales. In 2014, Japan held less than 1% and the “other” countries (e.g., South Korea, Singapore, etc.) represented only 6% of the market held by the top 50 fabless IC suppliers.

Although its original plan of establishing numerous large indigenous IC manufacturers in China was not successful, it is obvious that the Chinese government still intends to create a dynamic environment in the China-based IC industry, including placing additional emphasis on establishing new fabless IC suppliers.

IC Insights believes that the Chinese government’s commitment to creating a more powerful Chinese presence in the future IC industry is alive and well and should be taken seriously.