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Chinese chipmakers target analog IC market

Rapid growth of the new energy vehicle (NEV) market and rising demand for analog chips used in automotive electronics is promoting the expansion of global analog chip manufacturers, including Chinese chipmakers.


Wingtech enters analog IC market through M&A

In 2019, China-based Wingtech Technology acquired Nexperia, a spinoff of Dutch semiconductor company NXP Semiconductor, a top-10 leader in the global analog IC market. Through the acquisition, Wingtech entered the integrated device manufacturing (IDM) field with three main business sectors: semiconductors, optical modules, and communications products. In the same year, Nexperia established a research institute in China that focuses on the R&D of high voltage power components and analog ICs.

Nexperia recently opened its first R&D center in North America. It is expected to recruit more than 100 engineers to develop power management and analog chips in Texas. The center will develop more complex chips including voltage regulators and data converters for its discrete power components.

Irene Deng, general manager of BG power and signal conversion at Nexperia, said the company's goal is to become a leading supplier in key semiconductor fields. Nexperia aims to achieve US$10 billion in sales by 2030.

Wingtech also acquired camera lens module manufacturer Ofilm Group to get into the smart manufacturing industry chain, as well as UK chipmaker Newport Wafer Fab to expand Nexperia's product portfolio and production capacity in automotive-grade manufacturing.

Wingtech's acquisitions highlight the company's ambition to get into the analog IC market.


Chinese chipmakers look to seize analog IC market

Texas Instruments (TI) currently leads the global analog chip market, with companies such as Analog Devices (ADI), Skyworks Solutions, Infineon Technologies, STMicroelectronics (STM), NXP, Onsemi, and Renesas Electronics rounding out the competition.

The mainstream business model in the analog chip industry is IDM. The industry focuses on accumulated experience, long R&D cycles, and a wide range of products. As a result, duplicating and replacing analog products and technologies is difficult, and changes in market competition do not happen often.

The Chinese analog chip market currently accounts for one-third of the global market, but the country's self-sufficiency is low.

Given that the analog IC market is highly fragmented, related products and the downstream market are diverse. Since an oligopoly has yet to form, companies still have the opportunity to enter the market through other market segments.

At the same time, as the largest consumer electronics production base, China has a high demand for low- and mid-level analog chips. This also gives Chinese companies more space to provide substitute products. Chinese companies rising in this space include China Resources Microelectronics (CR Micro), Maxscend Microelectronics, Awinic Technology, Will Semiconductor (Will Semi), Bright Power Semiconductor (BP Semi), SG Micro, and Fine Made Electronics (FM).

Among this group, power component manufacturer CR Micro has the most comprehensive product line. CR Micro also built China's first 4-inch and 6-inch wafer production lines. Their IC products mainly include PMICs that are widely used in consumer electronics, automotive electronics, and industrial control. The company expects to increase its 8-inch wafer production capacity this year.

Maxscend, China's RF chip leader, mainly provides RF switches, RF filters, and RF power amplifiers. Awinic also has a comprehensive range of PMIC products.

Even though emerging markets such as NEVs still account for a low proportion of the market, their rapid growth has garnered the attention of analog IC manufacturers.

According to a June 2021 report by Verified Market Research, the global analog IC market will grow from US$349.46 billion in 2020 to US$669.1 billion in 2028, for a compound annual growth rate (CAGR) of 8.46% from 2021 to 2028.