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China became the largest IC market in the world in 2005 and has continued to grow in size since then. In 2020, China's IC market increased to US$143.4 billion, a 9% gain from US$131.3 billion in 2019, according to IC Insights.
While China has been the largest consuming country for ICs since 2005, the nation is not necessarily a major producer of ICs now, IC Insights indicated. Of the US$143.4 billion worth of ICs sold in China in 2020, only 15.9% or approximately US$22.7 billion were produced in the country last year.
Of that amount, IC Insights continued, China-headquartered companies produced only US$8.3 billion accounting for only 5.9% of the country's total IC market last year. Foreign companies with wafer fab operations in China, such as TSMC, SK Hynix, Samsung, UMC, still account for much of China's IC production.
About 26% or US$37.5 billion of China's US$143.4 billion IC market last year came from sales of logic chips, IC Insights noted. Logic ICs will remain China's largest IC product segment through 2025, maintaining a strong CAGR of 10.5% through the forecast period, IC Insights said.
Strong sales of smartphones in China and throughout the world along with an uptick in sales from various computing systems during the virus-plagued year resulted in microprocessors being the second-largest IC product segment in China last year, IC Insights indicated. MPU sales in China, including revenue from application-specific processors, grew 12% in 2020 to US$32.7 billion.
With 19% share, DRAM was the third-largest IC market in China last year, IC Insights said. In 2020, DRAM and NAND flash together accounted for 30% of China's total IC market. The high level of memory consumption in China also helps fuel the country's burning desire to create an increasing amount of indigenous production of both DRAM and NAND flash devices.
There is no denying the long-term trend toward increasing IC marketshare in China and the rest of the Asia-Pacific region. China and Asia-Pacific are forecast to increase their combined share of the worldwide IC market from 63.8% in 2020 to 68.1% in 2025, which represents a CAGR of 9.4% over this period, according to IC Insights.