Market Trends of China Integrated Circuit (IC) Industry
Increased Applications Of ICs In Consumer Electronics Expected To Promote Demand
- China is also among the largest manufacturer and consumers of consumer electronic products. According to the data provided by China Customs, China exported approximately USD 3.36 trillion worth of goods in 2021, reporting a growth export value of about 30 percent compared to the previous year. As consumer electronics and other electrical products constitute a significant portion of the export value, the studied market is expected to witness sustained growth in the country.
- Furthermore, according to the National Bureau of Statistics of China, the total retail sale of consumer goods in the country increased from CNY 39.2 trillion (USD 5.39 trillion) to CNY 44.1 trillion (USD 6.06 trillion). Such trends also create a favorable market scenario for the growth of the studied market in China.
- Moreover, according to National Bureau of Statistics of China, by March 2024, China boasted a staggering 1.75 billion mobile cell phone subscriptions. Official government data underscored a near-universal mobile internet penetration rate of 99.8%, illuminating the nation's profound digital transformation.
- However, factors such as the recent ban put down by the US government on advanced electronic design automation (EDA) software exports to China may hinder Chinese chip companies from accessing advanced semiconductor technology, which in turn may negatively impact the growth of the IC market in the country.
- However, the IC market in China has also expanded with the development of industries such as communications, consumer electronics, and other industries. According to the Ministry of Industry and Information Technology, 5G base stations across China exceeded 1.85 million by the second quarter of 2022. The country added nearly 300,000 5G base stations in the year's second quarter.
- Further, the growing penetration of 5G technology is driving the demand for 5G enabled smartphones and supporting the digitization of other industries. The high-speed data connectivity facilitated by 5G is expected to positively impact industrial automation and the adoption of advanced technologies such as AI, IoT, etc. As a broad range of electronic devices is used to establish such infrastructure, the demand for ICs is also expected to grow.
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Analog Based Application-Specific IC Are Expected To Grow At Faster Pace
- Application Specific Analog ICs designed for and used in all various consumer portable and non-portable audio/video devices, consumer equipment, automotive, and infotainment systems, among others.
- Generally, these circuits coordinate with devices that receive signals from the environment or send alerts back, which are then modified (e.g., amplified, filtered, etc.) to match the output requirements. For instance, a microphone is an audio device that converts fluctuating vocal sounds into an electrical signal of varying voltage using an analog IC. Although digital ICs are increasingly being adopted in consumer electronic devices, analog ICs are still used for audio/video applications as they offer much higher density and can present more refined information.
- Recent years have witnessed significant growth in demand for audio/video devices, especially in the consumer market. Many consumers today rely heavily on their audio products to aid connectivity and gaming, video watching, remote working, and music listening. Furthermore, the growing popularity of online streaming and OTT platforms globally has enhanced the demand for audio/video devices.
- Similarly, the video gaming industry has witnessed remarkable growth in recent years, with video gaming participation even becoming mainstream. The advent of AR and VR technologies is further improving the overall gaming experience, which, in turn, is propelling the growth of China's IC Market.
- The wearables industry is also expected to have the highest impact on the growth of the studied market, as the demand and market penetration of these devices has been growing significantly. With the application area for these devices expanding rapidly-from wellness and fitness to more sophisticated sectors such as communication, medical, and military-owing to the technical maturity of wearable devices, the demand for application-specific analog ICs is expected to remain high during the forecast period in the region.
- Moreover, the growing adoption of automotive and various new electric and hybrid vehicles in the region is also expected to fuel the IC market in China during the forecast period. The growth of the automotive industry is driving the demand for analog ICs, which in turn is encouraging IC manufacturers to expand their production capacities further and develop innovative solutions. For instance, in August 2022, Analog IC foundry GTA Semiconductor started its capacity expansion project in the LingangSpecial Area in the Shanghai Pilot Free Trade Zone, with plans to set up new production lines for automotive chips.
