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Hidden Market Secrets: Why China's Semiconductor Sales Reached $192.5 Billion?
The semiconductor industry is a general term for companies that design and manufacture semiconductors and semiconductor equipment (such as transistors and integrated circuits). The origins of the industry date back to 1948 when Shockley, Brattain and Bardeen invented the transistor at Bell Labs. As this technology was licensed, many companies entered the market, such as Motorola, Texas Instruments, and Fair Semiconductor, and grew rapidly in the manufacturing of transistors.
In 1958, Jack Kilby of Texas Instruments and Robert Noyce of Fair Semiconductor independently invented the integrated circuit. This method allowed multiple transistors to be manufactured on a single semiconductor wafer, bringing revolutionary changes to the semiconductor industry. Rapid advances in manufacturing technology then led to exponential growth in semiconductor device production, a phenomenon known as Moore's Law that continued to influence the industry for decades to come.
“The growth of most semiconductor businesses is closely related to technological advancements, which causes market demand to change rapidly.”
According to the Semiconductor Industry Association, semiconductor sales in 2021 will reach a record high of 555.9 billion U.S. dollars, of which China’s sales are estimated to be 192.5 billion U.S. dollars, showing this country’s important position in the global semiconductor supply chain . With the rapid development of mobile devices, artificial intelligence and the Internet of Things, China's semiconductor market demand remains strong and will continue to grow in the next few years.
Market structure and competition landscape
The global semiconductor market is dominated by companies in the United States, Taiwan, South Korea, Japan and the Netherlands. The innovation and technological strength of these countries and regions have incomparable advantages. Unique market characteristics include continued growth but attendant high volatility, which requires participants to have a high degree of flexibility and innovation to respond to the rapid changes in the market.
Currently, large players in the market, such as Taiwan's TSMC and South Korea's Samsung, have become the main suppliers of the most advanced semiconductors, mainly because the investment costs of establishing advanced manufacturing plants are extremely high. For example, TSMC’s latest factory, which specializes in manufacturing 3-nanometer semiconductors, costs US$19.5 billion to build.
“The market changes not only rapidly, but also often heralds changes in other industries.”
The rise of China
In the past few years, China's semiconductor industry has grown at an exponential rate. Thanks to the strengthening of domestic market demand and the government's strong support for the semiconductor industry, China has become one of the world's largest semiconductor markets. About 32.4% of the semiconductor market is used for network and communication equipment, bringing China's semiconductor sales to $192.5 billion.
This growth in China has changed the pattern of the global supply chain. This trend reflects the importance attached to China's power in the international market. China's semiconductor market still has huge potential due to strong demand for high-end chips and a growing electronics industry.
Production trends and future prospects
In the coming years, the semiconductor market is expected to continue to grow and is expected to reach $726.73 billion by 2027. As chip technology further improves and innovates, companies must continue to adjust their strategies and introduce more automation and intelligence in order to remain invincible in this continuously evolving market.
"The progress of science and technology lies in continuous innovation and change. Enterprises must be prepared to continue to make profits."
To summarize, China's amazing achievements in the semiconductor field are driven not only by local market demand but also by government policy support and investment. This rise has caused the global market to re-examine China's role and influence in the high-tech field. Facing future challenges, will the global semiconductor industry enter a new competitive landscape, or will there be more cooperation?
