Chinese Semiconductor Industry Continues on an Upward Trend
China’s impact on the global semiconductor industry continued on an upward trend in 2015, with chip consumption and production revenues increasing at a greater rate than worldwide revenues. According to PwC’s 2016 update to its annual report, China’s impact on the semiconductor industry, China’s share of the consumption market increased by 5.9% in 2015 to 58.5% of the worldwide total, marking a new record.
For the fifth consecutive year, China’s semiconductor consumption growth continued to far exceed worldwide semiconductor market growth. This was driven by two factors: the continuing transfer of worldwide electronic equipment production to China and the above-average semiconductor content of that equipment. Overall, the country accounted for 16.2% of the worldwide semiconductor industry in 2015, up from 13.4% in 2014.
From 2005 through 2015, China’s semiconductor industry grew at a 10-year compounded annual growth rate of 18.7% while its semiconductor consumption increased at a rate of 14.3% and the worldwide semiconductor market grew at a 4.0% rate. “For China’s semiconductor industry, all signs point to continued moderate but sustainable growth over the next few years,” said Raman Chitkara, PwC Global Technology Industry Leader. “Government incentives and market conditions should continue to benefit the now-mature industry, leading to long-range moderate growth and a further narrowing of the consumption/production gap.”
China reported a notable reversal of its integrated circuit consumption/production gap in 2015, an additional sign of a maturing and stabilising market. The difference between consumption and production revenues decreased for the first time since 2009, and only the second time since 1999. Moreover, it is now forecast to continue decreasing for each of the following three years.