China Semiconductor Market Size and Share Outlook - Forecast Trends and Growth Analysis Report (2025-2034)

China Semiconductor Market Growth

China's automotive sector is experiencing significant growth, with projections indicating that domestic production could reach 35 million vehicles by 2025. According to the Ministry of Industry and Information Technology, vehicle sales surpassed 26 million in 2021, which included 21.48 million passenger vehicles, a 7.1% increase from 2020. The growth of the automotive sector, particularly in electric vehicles (EVs) and autonomous driving technologies, is driving a substantial increase in the demand for semiconductors. Modern vehicles require sophisticated chips for various functions, such as power management, infotainment systems, sensors, and autonomous driving capabilities. The transition to electric vehicles demands semiconductors for battery management systems, motor control, and charging infrastructure. Furthermore, autonomous vehicles depend on intricate sensors, cameras, and artificial intelligence-driven systems, all of which require specialised semiconductors. As the automotive sector increasingly integrates electronics, the need for high-performance semiconductors is rising, significantly influencing the China semiconductor market dynamics and trends.

China announced a defence budget of USD 236 billion for 2024, representing an increase of over 7% and marking the 30th consecutive year of growth. This budget accounts for 1.2% of the country's GDP, which is lower than the global average of 1.8%. The increase in defence spending is closely linked to the rising demand for semiconductors, as advanced chips are essential for modern military technologies, including artificial intelligence systems, communication, radar, and autonomous vehicles. The integration of semiconductors in the defence sector significantly improves performance, precision, and efficiency, playing a crucial role in enhancing China's defence capabilities.

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Key Trends and Developments

China Semiconductor Market Trends

The market is experiencing significant growth, driven by increasing domestic demand, supportive government policies, and technological innovations. A major trend in the market is the emphasis on self-sufficiency, with substantial government investment aimed at enhancing local chip production to lessen dependence on foreign technologies. The emergence of 5G, artificial intelligence, and the Internet of Things is boosting the need for advanced semiconductors in mobile devices, the automotive sector, and smart technologies. China's commitment to advanced manufacturing is resulting in investments in state-of-the-art semiconductor fabrication techniques to enhance its global competitiveness. Furthermore, the automotive sector, especially in electric vehicles and autonomous driving, is generating a strong demand for chips used in sensors, power management, and control systems. These trends feature China's strategic objective to establish itself as a leader in the global semiconductor landscape.

China Semiconductor Industry Segmentation

China Semiconductor Market Share

Based on the application, China semiconductor market supports the aerospace and defence industries by supplying advanced chips for navigation, communication, and surveillance systems. This strengthens national security, fosters technological innovation, and reduces reliance on foreign suppliers, thus enhancing China's self-reliance in vital aerospace and defence technologies. In May 2024, Chinese chip makers and rocket developers formed the Commercial Space Industry Technology Alliance, led by the Harbin Institute of Technology, to advance the aerospace sector. With over 100 members, including Loongson Technology and iSpace, the alliance sought to drive innovation and support China’s aspiration to become a dominant aerospace nation.

The healthcare sector is enhanced through the development of medical devices, diagnostic tools, and wearable health technologies. Advanced chips improve the accuracy and efficiency of medical equipment, facilitate telemedicine, and drive innovation in personalised healthcare, ultimately improving care quality and expanding access to medical services. In March 2024, Huawei, in collaboration with SMIC, filed patents for a technology known as self-aligned quadruple patterning (SAQP). This technique etches lines on silicon wafers multiple times to increase transistor density, lower power consumption, and boost performance. SiCarrier had already been granted a related patent in late 2023.

The market supports the automotive sector by providing chips essential for advanced driver-assistance systems (ADAS), electric vehicles (EVs), and autonomous driving technologies. These innovations improve vehicle safety, performance, and energy efficiency, fostering a more sustainable and technologically advanced automotive industry in China.

The semiconductor market aids the consumer electronics industry by supplying chips for smartphones, tablets, wearables, and home appliances. These semiconductors enhance performance, extend battery life, and introduce advanced features, reinforcing China’s position as a global leader in the production and innovation of consumer electronics.

In the industrial sector, demand for the China semiconductor market is driven by their support for automation, robotics, and IoT applications. These chips enhance operational efficiency, precision, and data processing, fostering technological advancements in manufacturing and industrial systems, and establishing China as a significant player in global industrial development.

Leading Companies in the China Semiconductor Market

Key players in the China semiconductor market are concentrating on adopting technological advancements to secure a competitive advantage. The integration of technologies like AI, 5G, and the Internet of Things is driving demand for more efficient semiconductors. Moreover, advances in chip design and production are enabling smarter devices, enhancing performance, and transforming sectors across the world.

Infineon Technologies AG

Infineon Technologies AG, founded in 1999 and headquartered in Neubiberg, Germany, is a leading provider of semiconductor solutions designed for the automotive, industrial, and consumer markets. The company is well-known for its innovations in power semiconductors, microcontrollers, and sensor technologies.

Analog Devices, Inc.

Analog Devices, Inc., established in 1965 and based in Norwood, Massachusetts, is a global leader in...

Microchip Technology Inc.

Microchip Technology Inc., founded in 1989 and headquartered in Chandler, Arizona, specialises in mi...

NXP Semiconductors NV

NXP Semiconductors NV, established in 2006 and headquartered in Eindhoven, Netherlands, is a major s...

*Please note that this is only a partial list; the complete list of key players is available in the full report. Additionally, the list of key players can be customized to better suit your needs.*

Other major players in the China semiconductor market are Texas Instruments Inc., ON Semiconductor Corp., Skyworks Solutions Inc., Renesas Electronics Corp., and Qorvo Inc., and MediaTek Inc., among others.