China's chip industry sees rapid Q1 growth

Updated 2018-05-03 10:12:19

Two domestic firms ranked among top 8 globally

China's chip-making industry has seen rapid growth in the first quarter of 2018, amid the rising performance of Chinese semiconductor foundries in the global market.

According to data released by China's Ministry of Industry and Information Technology (MIIT) on Wednesday, in the first quarter of 2018, the value of China's electronic information manufacturing industry grew by 12.5 percent year-on-year, faster than the growth rate of all above-scale industries by 6.7 percentage points.

The number of integrated circuits (ICs) produced reached 39.99 billion in 2017, an increase of 15.2 percent compared with 2016, and the number of electronic components reached 1.128 trillion, an increase of 22.7 percent year-on-year, said the MIIT.

Data released by global industry consultancy IC Insights in April also showed that two Chinese mainland-based semiconductor foundries, Semiconductor Manufacturing International Corporation (SMIC) and Huahong Group, both based in Shanghai, ranked among the top eight foundries in the world in 2017, and the latter saw a year-on-year increase in sales of 18 percent, the highest of all.

SMIC, the largest foundry in the Chinese mainland, saw a year-on-year increase in sales volume of 6 percent in 2017, reaching .01 billion, ranking fifth among all of the top eight foundries in the world, said the consultancy company.

Huahong Group saw its sales volume reach .95 billion, taking it to seventh place compared with eighth place in 2016. It also showed the fastest growth among the top eight market players.

Demand for foundry services in China has been surging in recent years with the rise of fabless IC manufacturing, in which companies design chips and outsource production, or fabrication, to a specialist supplier.

Since 2010, all the fastest-growing suppliers in the global fabless IC market have come from China, and out of the 50 largest fabless IC suppliers in the world in 2017, 10 of them are Chinese companies, said IC Insights.

Some of the largest global suppliers, including TSMC, GlobalFoundries, UMC, Powerchip, and, most recently, TowerJazz, have made plans to either open or expand production facilities in the Chinese mainland in the next few years.

Taiwan Semiconductor Manufacturing Company (TSMC) continued to lead the global IC foundry market in 2017, with sales of .2 billion, five times more than those of second-ranked US-based GlobalFoundries.

The top eight major foundry firms took up 88 percent of the .3 billion worldwide foundry market, the same level as in 2016, and this market share is expected to continue in the future, said IC Insights.

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