China now produces 1 billion chips every day
In June, Chinese semiconductor manufacturers produced more than 1 billion chips every day, a record high. However, although local chip manufacturers have set records, this is not enough to meet the needs of Chinese manufacturers who import most of the semiconductors they use.
171.2 billion ICs have been produced so far this year
According to the National Bureau of Statistics, Chinese semiconductor manufacturers (including memory and logic component manufacturers) produced 30.8 billion chips in June, an increase of 43.9% over the same period in 2020. The report said South China Morning PostIn May, Chinese manufacturers produced 29.9 billion ICs. In the first six months of this year, Chinese manufacturers produced 171.2 billion semiconductors, a year-on-year increase of 48.1%.
There is no doubt that the production of 30.8 billion chips in a month is a lot. However, China imported 51.9 billion semiconductors in June, which means that the country can manufacture about 37% of its semiconductor needs. This means that it has a strong installed capacity, but it is completely self-sufficient in terms of chip supply.
Catching up with japan
Earlier this week, Integrated circuit insight The 2021-2025 global wafer production capacity report shows that Taiwan, South Korea and Japan are the top three countries in the world in terms of production capacity, controlling more than half of the global semiconductor production.
As the host of the world’s largest logic chip contract manufacturer TSMC, United Microelectronics, a number of small foundries and numerous DRAM manufacturers, Taiwan controls 21.4% of global semiconductor production. According to IC Insights, Taiwanese companies can process up to 4.448 million 200mm equivalent wafers per month.
South Korea has Samsung Electronics, SK Hynix, the world’s largest 3D NAND and DRAM memory manufacturers, and some smaller semiconductor companies. According to IC Insights data, as of the end of 2020, the country’s semiconductor companies can process up to 4.253 million 200mm equivalent wafers per month, and occupy about 20.4% of the market share.
Japanese companies no longer produce leading logic chips, but the country has the world’s largest 2D/3D NAND production facilities operated by Kioxia and Western Digital. In addition, companies like Renesas are still producing chips for various industries, including automobiles, and the country has numerous fabs. Japanese companies can process approximately 3.281 million 200mm equivalent wafers per month, controlling approximately 15.8% of global semiconductor production.
China is actually the fourth largest chip producer in the world, with a monthly production capacity of 3.184 million 200mm equivalent wafers, with a share of 15.3%, which is basically the same as Japan. It should be noted that most of the logic chips made in China are processed with nodes of 28nm or thicker, so they cannot really be used in devices that require real high performance, such as mainstream and high-end PCs. In addition, Samsung and SK Hynix, which have fabs in China, are not eager to transfer their leading technologies to China.
The United States closed the world’s top five largest chip makers with a 12.6% share and a monthly production capacity of approximately 2.633 million 200mm equivalent wafers. Although the United States is clearly behind China, Japan, and South Korea, it is important to remember that American companies that have fabs in the country mainly produce expensive, highly profitable logic chips.
China’s semiconductor industry has made extraordinary progress in the past 20 years, has not lost momentum, and will grow further, this year or next year may replace Japan from the top three of IC Insights.
However, since Chinese logic producers are at least five years behind industry leaders such as Intel, TSMC or Samsung foundries, the country is unlikely to produce advanced CPUs or GPUs in the short term. Nevertheless, even the local logic industry can meet the needs of many Chinese chip designers.