PricewaterhouseCoopers (PwC) has recently released the third chapter of its annual report on China’s semiconductor industry. The report, entitled China’s Impact on the Semiconductor Industry 2012, provides a detailed and comprehensive picture of both China’s semiconductor market and industry. Chapter 3, which focuses on IC design in China, highlights that revenues in China's IC design sector grew by 36 percent in 2011 to reach a record $7.33 billion. China's semiconductor industry growth far exceeded total worldwide semiconductor industry growth. The report states that China’s IC design sector revenue growth in 2011 exceeded that of the other major semiconductor segments in China, bringing the sector’s share of the country’s total semiconductor industry to 16.8 percent, up from 14.1 percent in 2010.
According to the report, revenue from China’s fabless semiconductor firms comprised roughly 10 percent of the global fabless IC industry in 2011, up from seven percent in 2010 and one percent in 2001. The report concludes that the China Center of Information Industry Development (CCID) forecasts the ID design sector in China to grow to $14 billion by 2014, a compound annual growth rate of 22.4 percent.
The chapter includes details on the type of IC design enterprises in the sector, drivers of sector growth, sector employment profile, and innovation level of firms. It also addresses the challenge with obtaining reliable data on the industry. For example, while the CCID reports there were 503 ID design enterprises in China at the end of 2011, PwC reports considerable skepticism on the part of many foreign industry associations and analysts regarding the size of this number and its makeup. Furthermore, the report highlights the fact that as the industry has grown, it has become increasing difficult to obtain certain company data. Having access to relevant and complete company and industry data is important to provide an accurate picture of the industry as a whole.
The PwC report is a highly recommended read, and SIA will be sure to notify members when future chapters are available. PwC has published the report annually since 2004. 2012 is the first year that PwC has published chapters of the report on a rolling basis as a way to provide parts of the report as soon as they are complete. Chapters 1 and 2 spotlighting China’s market and industry were released in July.
Chapters 1, 2, and 3 of the report can be accessed here.