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[News] China’s Chip Design Industry to Grow 12% in 2024, Though High Product Concentration Remains an Issue
Against the backdrop of the gradual recovery of the global semiconductor industry, China’s chip design industry is expected to deliver double-digit growth this year, reaching total sales of RMB 646 billion (roughly USD 90.99 billion) in 2024, according to the Integrated Circuit Branch of the China Semiconductor Industry Association, cited by Chinese media outlet icsmart.
Growth Momentum Weaker than Global Semiconductor
The report, citing Professor Wei Shaojun, Chairman of the Integrated Circuit Design Branch of the China Semiconductor Industry Association, notes that this marks a year-on-year increase of 11.9% for China’s chip design sector, while the global semiconductor industry is expected to grow more, posting a 19% year-over-year growth this year.
According to Wei, this indicates that the growth of China’s chip design industry is gradually becoming more rational, reflecting the industry’s transition to a higher-quality development stage, rather than simple quantitative expansion, as per the icsmart report.
However, the report also brings up concerns that the growth rate of leading enterprises in China’s chip design sector has been relatively weak, which may imply the intensification of market competition, with small and medium-sized enterprises and startups burgeoning
Wei pointed out that although the total number of enterprises in China’s chip design industry increased to 3626 in 2024, a growth of 175 compared to 2023, the total sales of the top ten companies have decreased from RMB 182.916 billion (roughly USD 26.13 billion) to RMB 176.204 billion (roughly USD 25.17 billion), representing a decline of 3.7%, as noted by the report.
Overly Production Concentration on Communication and Consumer Electronics
At present, the proportion of small and micro-sized enterprises remains relatively high in China. According to icsmart, chip design firms with fewer than 100 employees still dominate China’s chip design sector, as they account for about 88% of the total number of enterprises.
It is worth noting that China’s chip design industry still faces the issue of overly product concentration. According to icsmart, citing Wei, in 2024, products related to the communication and consumer electronics fields account for 68.5% of the total revenue of China’s chip design companies, while the proportion of computer chips remained low at only 11%. This data reportedly indicates that China’s chip design remains at a relatively low-end position in the global industry chain and has yet to make significant breakthroughs in high-end technology.
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(Photo credit: Unisoc)
