By Li Panpan

(JW Insights) Apr 19 -- China needs to use the advantage of the rise of its IC market to reshape the global industry chain after 15 years of fast development, despite facing geopolitical changes, said Ye Tianchun, chairman of the IC Branch of the China Semiconductor Industry Association, reported JW Insights on April 19.

Ye made his speech at the 25th China IC Manufacturing Annual Conference (CICD) and Supply Chain Innovation Forum held in Guangzhou, southern China’s Guangdong Province, from April 17th to 19th.

Other experts expressed similar opinions. Wei Shaojun, chairman of the IC Design Branch of the China Semiconductor Industry Association, said that China is upgrading its IC industry while western countries are reconstructing it. Wei’s speech at the conference is entitled "Strengthening Collaboration in the Design Sector and Improving Supply Chain Security."

With a titled "Re-globalization vs. Anti-globalization - thoughts on integrated circuits with Chinese characteristics," Ye analyzed sales of China’s IC manufacturing in the past year. The sales revenue of China's IC manufacturing industry increased by 21.4% in 2022. But the market share of Chinese-invested companies was still less than others in the industry.

The packaging and testing industry registered a yearly growth of 8.4% in 2022. The sales of the country’s IC equipment grew 30.8 times from 2008 to 2022 due to geopolitical changes. The Chinese material industry also maintained a relatively rapid growth rate driven by supply chain security.

The challenge of China’s IC industry lies in the high dependence on the international market. In the past 15 years, China has formulated policies such as major special projects, the Big Fund, and the STAR Market to drive the development of its IC industry. Progress has been made in all sectors like design, manufacturing, equipment, materials, and packaging, said Ye.

The strategy for the next stage is to "focus on products and industry solutions" to promote the systematic development of design, manufacturing, and equipment materials. During this process, China needs to use the advantage of the rise of its IC market to reshape the global industry chain, added Ye.

China is in a critical period of a new round of technological revolution, industrial transformation, and supply chain improvement. Its rapid development of networking, digitalization, and intelligence becomes the new driving forces and brings new markets for developing ICs. The Chinese mainland’s semiconductor market will reach $223 billion by 2025, according to Ye’s speech.

However, insufficient investment in research and development is holding back the development of China's semiconductor industry.

Wei pointed out that China has been upgrading its IC industry from labor-intensive to intelligence-intensive. The technology, productivity, supply chain, and industry model are moving to higher-end, while Western countries are reconstructing the IC industry, which is completely opposite to China. Geopolitical changes resulting from the global IC supply chain are against the law in the global semiconductor industry development.

Wei is also the vice chairman of the China Integrated Circuit Innovation Alliance, which was set up in March 2017 in Beijing. It is supported by the Ministry of Science and Technology, the Ministry of Industry and Information Technology, and the Big Fund. The Alliance has nine sub-alliances in specific IC sectors, with over 900 members. Six sub-alliances focusing on equipment, materials, parts, components, packaging and testing, and investment participated in CICD 2023.