Market Trends of China Semiconductor Device Industry
Automotive Sector is Expected to Drive the Market
- As per vehicle production statistics, China was the largest automotive market in the world in 2021.The country is expected to retain its dominance in the automotive semiconductor market during the forecast period. The rising demand for vehicles in the country, coupled with favorable regulations and economic labor costs, has boosted local vehicle production.
- An increasing number of original equipment manufacturers (OEMs) are offering advanced automotive electronics in economic vehicle variants. The surging demand for comfort and safety features in today's vehicles is expected to drive the automotive semiconductor market in China. The Government of China has placed strategic emphasis on plug-in hybrid electric vehicles (EVs) and pure EVs while promoting the adoption of energy-efficient hybrid vehicles. Their sales are also increasing rapidly.
- The Chinese government plays a pivotal role in driving R&D and intends to make the country an R&D hub for vehicles and vehicle technologies. Also, China has incentives for electric cars, plug-in hybrids, and fuel-cell vehicles. The use of basic engine semiconductors to lower carbon emissions in passenger cars is also expected to contribute to the growth of the automotive semiconductor market.
- In 2023, China outpaced all countries in passenger car production, manufacturing approximately 26.1 million units, as reported by OICA. China retained its position as the leading producer of light vehicles. Homegrown manufacturers like SAIC, Changan, Dongfeng, Geely, and BAIC, the latter in partnership with Mercedes-Benz Group, are notably expanding their market presence. China's success in vehicle production, spanning both passenger cars and trucks, owes much to its strategic joint ventures with international counterparts.
Understand The Key Trends Shaping This Market
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Consumer Electronics is Expected to Hold Significant Market Share
- Most consumer electronics, like mobile phones, laptops, game consoles, microwaves, and refrigerators, operate with semiconductors, such as integrated chips, diodes, and transistors. The high demand for these devices is a crucial factor contributing to the growth of the studied market.
- Integrated circuits are widespread in consumer electronics with microprocessor control, from cell phones and portable music players to gaming systems, personal computers, and other digital devices. An integrated circuit (IC) or chip is a highly sophisticated device packing up many electronic components like transistors, resistors, and capacitors into an area of a few square centimeters on a silicon wafer.
- Further, semiconductor memory is a digital electronic data storage device implemented with semiconductor electronic devices on an integrated circuit. Different types of memory are available, such as dynamic random access memory (DRAM), static random access memory (SRAM), NOR Flash, NAND Flash, read-only memory (ROM), and erasable programmable read-only memory (EPROM). They find widespread application in digital consumer products like PCs, laptops, cameras, and phones.
- For instance, in July 2022, Samsung unveiled the world's first 24 Gbps GDDR6 DRAM chips, made for high-performance general processing units (GPUs) used in gaming PCs, laptops, and consoles. Also, in May 2023, NEO Semiconductor, a developer of innovative technologies for 3D NAND flash and DRAM memory, announced the launch of its ground-breaking technology, 3D X-DRAM. This development is the world's first 3D NAND-like DRAM cell array targeted to solve DRAM's capacity bottleneck and replace the entire 2D DRAM market.
- Further, trends such as consumer IoT (Internet of Things) have fueled the demand for semiconductor devices. An ideal example of consumer IoT is the smart home, where electronic equipment, heating, ventilating, and air conditioning (HVAC) systems, lighting, and appliances are all monitored and controlled from a central hub. IoT applications cannot work without sensors and integrated circuits, so all IoT devices require semiconductors, which creates a huge growth potential for the market studied.
- According to National Bureau of Statistics of China, in April 2024, China's cellphone production volume reached nearly 126 million units. Building on its momentum from the production of almost 1.4 billion cellphones by November 2023. China stands as a global leader in cellphone manufacturing, poised for further growth. Not only renowned for its manufacturing prowess, but China's domestic market has also emerged as one of the world's largest for mobile phones.
