In a keynote speech at the 2023 Beijing International Microelectronics Symposium and IC WORLD Conference, Wei Shaojun, the vice president of the China Semiconductor Industry Association (CSIA) and president of ICCAD, made a compelling case for China to take the lead in promoting the re-globalization of the semiconductor industry.
Wei acknowledged the significant impact of globalizing the semiconductor industry, which has led to the establishment of a global IC supply chain. China has been both a beneficiary and an active contributor to this globalized industry. Products undergo a complex journey that spans multiple countries, from chip design in the US to manufacturing in Taiwan, packaging and testing in Malaysia, and finally sales in China.
However, Wei highlighted the detrimental effects of ongoing geopolitical tensions on the global semiconductor industry. Some countries are resorting to legislative means to hinder competitors, rather than engaging in fair and constructive competition. These factors have disrupted the progress of globalization within the industry.
China's own semiconductor industry has flourished through embracing globalization and adopting the Fabless+Foundry+Service model. This model has resulted in rapid IC development in the country over the past few decades, allowing for optimal resource allocation on a global scale. However, the increasing fragmentation within the semiconductor field poses significant challenges to China's industry.
Unlike the IDM (integrated device manufacturer) model that dominates in other countries, China's semiconductor industry is primarily driven by IC design enterprises. Although China's global market share of IC products has increased from less than 5% in 2004 to 13.7% in 2022, with an annual compound growth rate of 20.6%, its focus remains largely on mid-to-low-end products, failing to meet domestic market demand.
In terms of foundry services, China's existing 12-inch wafer foundry capacity reached 436,000 units by the end of 2021. This marks a significant increase from the 197,000 wafers capacity before 2015, with an additional 239,000 wafers added since then. However, this capacity still falls far short of the monthly demand for 1.5 million wafers from China's integrated circuit design industry.
Despite these challenges, Wei stressed that China's chip industry continues to hold promising prospects. First, China is undergoing industrial upgrading, shifting from low value-added to high value-added production, from labor-intensive to knowledge-intensive processes, and from the periphery to the core of the industry. Second, China persists in upholding and leading economic globalization, having both benefited from and contributed to it, thereby safeguarding the global development of the semiconductor industry. Third, China's position in the global chip market will remain strong in the near term due to its significant presence in the industry. Fourth, China aims for self-sufficiency by overcoming blockades and constraints and seizing opportunities brought by the current wave of digitization. Fifth, China emphasizes the importance of maintaining an open posture while actively exploring new avenues and expanding into new spaces.
Wei emphasized that if China had played a follower role in the previous phase of semiconductor globalization, it must now assume a leadership role in promoting the re-globalization of the IC industry in the next stage.
