China Semiconductor Market Overview, 2029

China Semiconductor Market Overview, 2029

China’s semiconductor material market is experiencing robust growth and dynamic transformation, driven by the country’s strategic focus on self-reliance and technological innovation amid global geopolitical tensions. China is a significant player in the global semiconductor market, being the world’s largest consumer and a major producer of semiconductor components. The Chinese government has prioritized the semiconductor industry as a cornerstone of its national strategy, investing heavily in domestic capabilities to reduce dependency on foreign suppliers. This push has been accelerated by trade tensions with the U.S. and restrictions on technology exports, which have underscored the vulnerabilities in China’s semiconductor supply chain. China imports a substantial portion of its semiconductor materials, including silicon wafers, photomasks, and high-purity gases, primarily from leading suppliers in Japan, South Korea, and the United States. Despite these imports, China is aggressively developing its domestic semiconductor material production capabilities. Major Chinese companies and state-supported enterprises are investing in the production of critical materials, such as polysilicon, gallium arsenide (GaAs), and silicon carbide (SiC), essential for manufacturing high-performance semiconductors. The government’s “Made in China 2025” initiative underscores the aim to enhance local production of advanced materials and semiconductor components, fostering significant developments in this sector. In recent years, China has made substantial strides in building a comprehensive semiconductor ecosystem. The establishment of large semiconductor foundries, like SMIC (Semiconductor Manufacturing International Corporation), and the rapid growth of local material suppliers, are pivotal to China’s efforts to achieve greater self-sufficiency. These developments are complemented by strategic investments in research and development, focusing on next-generation semiconductor materials such as gallium nitride (GaN) and carbon nanotubes, which promise to drive the future of semiconductor performance and applications.

According to the research report ""China Semi Conductor Market Overview, 2029,"" published by Bonafide Research, the China Semi Conductor Market is expected to grow at more than 3.1% CAGR from 2024 to 2029. In China, growth and innovation in the semiconductor material market are driven by several key factors. Firstly, robust government support and investment in the semiconductor industry have played a pivotal role. The Chinese government has prioritized semiconductor manufacturing as a strategic initiative under its ""Made in China 2025"" industrial policy, aiming to reduce dependency on foreign technology and enhance domestic capabilities. This includes substantial funding for research and development, establishment of semiconductor manufacturing hubs, and incentives for attracting global semiconductor firms to set up production facilities in China. Secondly, the rapid expansion of consumer electronics, telecommunications, automotive, and industrial sectors in China has fueled substantial demand for semiconductor materials. The country's vast consumer base and growing middle class drive continuous innovation in electronic devices and infrastructure, thereby increasing the need for advanced semiconductor technologies. Thirdly, China's efforts to build a comprehensive semiconductor supply chain encompassing design, fabrication, packaging, and testing have led to significant advancements in domestic manufacturing capabilities. This integrated approach aims to strengthen the entire semiconductor ecosystem and reduce reliance on imports, contributing to a more balanced supply-demand dynamic within the country. Despite these advancements, challenges remain, such as technological gaps compared to established semiconductor leaders and global supply chain dependencies. The ongoing tensions in international trade and technology competition also impact China's semiconductor market dynamics. Nonetheless, China's proactive strategies, substantial investments, and expansive market opportunities continue to drive growth and innovation in the semiconductor material sector, positioning the country as a formidable player in the global semiconductor industry.

The semiconductor material market is segmented based on application and end-user industries, reflecting the diverse use cases and requirements of these materials. By application, the market is primarily divided into fabrication and packaging. Fabrication materials are essential for the production of semiconductor devices in fabrication plants, involving a range of process chemicals, photomasks, electronic gases, photoresists, and sputtering targets. These materials are critical in creating the intricate circuits and components of semiconductor devices. On the other hand, packaging materials are crucial for protecting semiconductor devices and ensuring their functionality. This segment includes substrates, lead frames, ceramic packages, and bonding wires, which are necessary to shield the delicate semiconductor components and maintain their performance in various applications. When categorized by end-user industries, the market is segmented into consumer electronics, telecommunication, manufacturing, automotive, energy and utility, and others. Consumer electronics encompass devices used daily, such as smartphones, tablets, laptops, gaming consoles, smartwatches, and home appliances. The telecommunication segment includes equipment and infrastructure used in communication networks, like smartphones, base stations, routers, switches, and other networking hardware. Manufacturing covers semiconductor applications in industrial and manufacturing equipment, such as automation systems, robotics, and industrial sensors. The automotive segment pertains to semiconductors used in vehicles, including conventional internal combustion engine vehicles, electric vehicles, and autonomous vehicles. The energy and utility segment involves semiconductor applications in energy generation, distribution, and management systems, such as smart grids, renewable energy systems, and energy storage solutions. Lastly, the 'others' category encompasses various applications of semiconductor materials not covered in the above categories, including healthcare devices, aerospace, and defense systems.

In China, government initiatives to promote the semiconductor material market are extensive and strategic, aimed at bolstering domestic innovation, manufacturing capabilities, and global competitiveness. Key initiatives include the ""Made in China 2025"" plan, which identifies semiconductors as a priority sector for development. This plan outlines goals to reduce reliance on foreign semiconductor imports, increase domestic production capacity, and foster technological advancement through substantial investments in research and development (R&D). The National Integrated Circuit Industry Development Guidelines prioritize the development of advanced semiconductor technologies, including materials, packaging, and design. Government funding and subsidies support semiconductor R&D projects, semiconductor fabrication facilities (fabs), and semiconductor equipment purchases, aiming to propel China towards semiconductor self-sufficiency. Regulations governing the semiconductor industry in China are multifaceted and include export controls managed by the Ministry of Commerce (MOFCOM) and the Ministry of Industry and Information Technology (MIIT). These controls ensure compliance with international trade agreements and govern the export of semiconductor-related products and technologies. Intellectual property (IP) laws, enforced by the State Intellectual Property Office (SIPO), protect semiconductor innovations through patents, trademarks, and copyright laws, fostering a conducive environment for technology development and investment. Environmental regulations, overseen by the Ministry of Ecology and Environment (MEE), mandate sustainable practices in semiconductor manufacturing, addressing issues such as emissions, waste disposal, and resource conservation.

The semiconductor material market in China faces several challenges despite its rapid growth and substantial investments in recent years. One significant challenge is the country's heavy reliance on imported semiconductor materials and equipment, particularly advanced lithography machines and high-purity chemicals. To address this, China plans to ramp up efforts to achieve semiconductor self-sufficiency through initiatives like the ""Made in China 2025"" strategy and the National Integrated Circuit Industry Development Guidelines. These initiatives aim to bolster domestic semiconductor production capabilities, reduce dependency on foreign technology, and foster innovation in semiconductor materials and manufacturing processes. Another challenge is the need to develop a skilled workforce capable of supporting the semiconductor industry's advanced technologies. China plans to address this by investing in education and training programs focused on semiconductor engineering, materials science, and semiconductor manufacturing techniques. Collaborative efforts between industry, universities, and research institutions aim to cultivate a talent pool equipped with the necessary skills and knowledge to drive technological innovation and meet the growing demand for semiconductor materials domestically. Supply chain vulnerabilities have also been highlighted, especially amid geopolitical tensions and trade uncertainties. China aims to mitigate these risks by diversifying sources of critical raw materials and components, enhancing domestic production capacity, and strengthening partnerships with international suppliers. Initiatives to build a resilient semiconductor supply chain include strategic investments in infrastructure, logistics, and technology transfer agreements aimed at securing a stable supply of semiconductor materials and reducing reliance on foreign imports.
Considered in this report
• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report
• Semiconductor Materials market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Application
• Fabrication
• Packaging

By End-User
• Consumer Electronics
• Telecommunication
• Manufacturing
• Automotive
• Energy and Utility
• Others

The approach of the report:
This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience
This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Semiconductor Materials industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.