China Sets to Dominate the Global Semiconductor Market - BizVibe

China has long been one of the most important players in the global semiconductor market, accounting for over half of the global market over the last five years, thanks to the country’s booming electronics and telecom industry. As the consumption of semiconductors in China continues its rapid growth, manufacturing of semiconductor products has also witnessed a strong upward trend in China. It’s forecasted that China will overtake the US to become the world’s leader in the global semiconductor market within the next five years.

 

Semiconductor market share in China

 

As the world’s largest consumer of semiconductor electronic components, China is currently on route to evolve as the world’s largest semiconductor producer. According to a report from PWC, the global semiconductor market was valued at $354 billion in 2016, up almost $30 billion from the previous year. China continues to be by far the largest consumer of semiconductors, totaling almost 60% of the global semiconductor market share. America comes in second, at around 12%, while Europe and Japan consume 6% and 5.5% respectively.

 


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Over the last ten years, both China’s semiconductor consumption and production revenues increased at a greater rate than worldwide revenues. From 2005 through 2015, China’s semiconductor industry grew at a ten-year compounded annual growth rate (CAGR) of 18.7%, while its semiconductor consumption grew at a rate of 14.3% and the worldwide semiconductor market at a 4.0% CAGR.

 

Semiconductor industry trends 2017

 

China’s growing production of semiconductors is believed to be mainly driven by the country’s wafer fab equipment spending trends over the last decade. According to a report from SEMI, China’s spending on fab equipment grew 180% from $2.3 billion in 2006, to $6.5 billion in 2016. Over the last ten years, fab equipment spending in both North America and Europe declined 39%, and Japan declined 50%. South Korea grew 10% and Taiwan grew 67%. In 2016, China followed behind Taiwan at $12.2 billion and South Korea at $7.7 billion. However, the report expects China will be the largest fab equipment market by 2019.

 

Industry experts believe that China will continue to play an increasingly influential role in the global semiconductor market with a moderate but sustainable growth rate over the next few years. However, to further the boost the semiconductor market in China, government incentives and market conditions should better benefit the industry, allowing for the further reduction in the consumption/production gap and long-range moderate growth.

 

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