China's Semiconductor Industry

Reports state that China’s semiconductor industry has become one of the country’s fastest growing sectors. The growth has been attributed to a major investment made from the Chinese government’s National IC Industry Investment Fund.

China is known to hold one of the world’s largest semiconductor market. The country’s semiconductor industry supplies core components to both smartphones and PCs. Sources now state that China will soon replace Taiwan as the main supplier for these parts.

Since China’s semiconductor market is already large enough, the amount of work put in for the components becomes a part of the country’s supply and demand system. Thus, the country reduces its reliance on any imports by creating every component locally. As such, it manages to absorb all profits without sharing any with an overseas provider.

China’s semiconductor market is rumored to hit $78 billion in the current fiscal year. This is almost a 19% hike over the profit reported in 2016. Sources state that the country’s revenue would grow almost 20% in the current year. This is extremely impressive since the average global growth is expected to be closer to 4%.

According to a research conducted by a Taipei company, TrendForce, a number of “wafer” factories in China could enter mass production during 2018. This would automatically coincide with the start of a number of new companies that have their focus on “specific IC markets”.

The news is not good for Taiwan, which has so far been the world leader where semiconductors are concerned. Taiwan officials have admitted that the country owes a major part of its billion dollar tech industry to semiconductors.

However, the country must now arm itself in the semiconductor battle against China. Taiwan’s chances seem slim in the face of China’s battle cry. China has a substantial domestic market, a generous amount of financial backing from the government, and is well known for attracting the best world talent.

Thus, it would appear that China is well on its way to seizing the monopoly of the semiconductor market, right from Taiwan’s clutching fingers.

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