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China-Based IC Production to Represent 21.2% of China IC Market in 2026

Update time : 2022-05-23 10:31:05

Foreign companies (e.g., Samsung, SK Hynix, TSMC, etc.) are expected continue to comprise more than 50% of IC production in China through 2026.

A very clear distinction should be made between China’s IC market and China’s indigenous IC production. IC Insights has stated that although China has been the largest consuming country for ICs since 2005, it does not necessarily mean that large increases in IC production within China would immediately follow.
As shown in Figure 1, IC production in China represented 16.7% of its $186.5 billion IC market in 2021, up from 12.7% 10 years earlier in 2011. Moreover, IC Insights forecasts that this share will increase by 4.5 percentage points from 2021 to 21.2% in 2026 (a 0.9 percentage point per-year gain on average).
Of the $31.2 billion worth of ICs manufactured in China last year, China-headquartered companies produced $12.3 billion (39.4%), accounting for only 6.6% of the country’s $186.5 billion IC market. TSMC, SK Hynix, Samsung, Intel, UMC, and other foreign companies that have IC wafer fabs located in China produced the rest. IC Insights estimates that of the $12.3 billion in ICs manufactured by China-based companies, about $2.7 billion was from IDMs and $9.6 billion was from pure-play foundries like SMIC.
If China-based IC manufacturing rises to $58.2 billion in 2026 as IC Insights forecasts, China-based IC production would still represent only 8.1% of the total forecasted 2026 worldwide IC market of $717.7 billion. Even after adding a significant markup to some of the Chinese producers’ IC sales (many Chinese IC producers are foundries that sell their ICs to companies that re-sell these products to the electronic system producers), China-based IC production would still likely represent only about 10% of the global IC market in 2026.

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