Explosive Growth in IC Trade
Over the past 20 years, Greater China—comprising China, Hong Kong, and Taiwan—has emerged as the dominant player in the global integrated circuits (ICs) trade. By 2023, the region accounted for 54% of the world’s IC market, totaling $1.12 trillion, driven by double-digit annual growth. Between 2001 and 2023, Greater China contributed a staggering 63% of global ICs trade growth, while the U.S. and EU saw their combined share diminish from 32% to just 10%. This shift underscores Greater China’s aggressive investments and rising influence in the semiconductor industry.
Strategic Investments in Semiconductor Manufacturing
China and Taiwan have invested heavily in semiconductor manufacturing infrastructure, with $450 billion spent on machinery and equipment over the last decade, representing half of global imports in this sector. China also became the world’s top exporter of silicon doped for electronics in 2023, accounting for one-third of global exports valued at $6.4 billion. Additionally, Hong Kong plays a strategic role as China’s IC trade gateway, with over 80% of its IC exports destined for China, making up 40% of China’s total IC trade. Hong Kong’s role as a logistics hub solidifies its position in the global semiconductor supply chain.
My Take
Greater China’s surge in IC market share underscores a fundamental shift in the global semiconductor landscape. While the U.S. and Europe’s CHIPS Acts are intended to bolster domestic manufacturing, creating a competitive shift could take 5 to 10 years due to the time needed to build infrastructure, develop a skilled workforce, and establish local supply chains. For these efforts to succeed, the U.S. and Europe must match Greater China’s scale and strategic alignment in the semiconductor supply chain. It won’t be easy.
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Link to article:
https://www.voronoiapp.com/technology/-Greater-China-The-OPEC-of-Silicon-Chips-2592
Credit: Visual Capitalist, @Soltani