China's Semiconductor Manufacturing

Start adding items to your reading lists:
or
Save this item to:
This item has been saved to your reading list.


China's semiconductor manufacturing capacity continues to grow faster than the worldwide semiconductor industry. We've put together the top finding on the following topics. Click on each tab to learn more.

  1. China's wafer fabrication capacity and share of worldwide capacity (2002-2016)
  2. Current wafer fab capacity comparison China and worldwide, 2016 
  3. Comparison of China and all remaining countries' SPA&T resources, 2016 
  4. Comparison of China and all remaining countries' SATS share of SPA&T resources, 2016 
  5. China's 2016 semiconductor manufacturing capacity by province and region

China’s wafer fabrication capacity and share of worldwide capacity (2002-2016)

During 2016 China increased its wafer fab capacity in production by more than the increase in total worldwide production capacity. China’s capacity increased by 324,000 8-inch equivalent wafer starts per month (WSpM), while world capacity only increased by 208,000. As a result, China’s share of worldwide wafer fab capacity increased to 14.2% in 2016 up from 12.9% in 2015, 12.0% in 2014 and about 11% in the four proceeding years. The number of wafer fabs in production in China increased from 169 in 2015 to 171 in 2016, while the number of fabs in production worldwide decreased from 1,031 to 1,030.

During the past ten years (since 2006) China wafer fab capacity has increased from 67 fabs with 1095.4 thousand WSpM to 171 fabs with 2829.6 thousand WSpM, representing an increase of 154% in the number of fabs and 193% in WSpM capacity (thousands of 8-inch equivalent wafer starts per month ramped).  By comparison, during the same ten years total worldwide wafer fab capacity only increased from 956 fabs with 13,153 thousand WSpM in 2006 to 1,025 fabs with 19,888 thousand WSpM, an increase of only 7% in number of fabs and 51% in WSpM capacity. During this past decade, China’s increase in the number of wafer fabs in production exceeded the increase in worldwide fabs in production as new fabs started in China displaced older fabs elsewhere.

By the end of 2016 China ranked third world wide in the number of wafer fabs in production, fourth in total current WSpM capacity, but only fifth in the number of advanced (28nm or less) wafer fabs in production.

Notes: Capacity is in thousands of 8-inch-equivalent wafer starts per month WF probability =/> 1.0

This is the maximum number of wfers in wafers per month that could be started each month if the fab were fully equipped as defined in the fab design specifications and if the equipment were fully utilized.

Current wafer fab capacity comparison China and worldwide, 2016

Despite its significant increase in 2016, China’s current wafer fab capacity continues to be notably different from worldwide in that 41% is devoted to foundry production versus 31% worldwide (Dedicated and IDM foundry combined), 38% to O-S-D (optoelectronics, sensors and discrete) versus 18% worldwide and only 11 fabs are 300mm out of a total 127 worldwide. Almost 60% of China’s current wafer fab capacity comes from wafer fabs whose origin (or ownership) is from China, with about 20% from Korea, 10% from Taiwan, 5% from the US and the remaining 5% from Europe and ROW (Rest of World).

Because China continues to represent a disproportionally large share (25.4%) of worldwide LED and discrete  fab capacity, it continues to have a much higher mix of smaller wafer size (125mm or less) and mature technology node (0.7um or greater) fab capacity than worldwide. Its share of worldwide mature technology node (0.2um or greater) capacity increased by almost 3% to 23%, while its share of intermediate technology node (0.2 to 0.28um) decreased by almost 2% to 13% and its share of worldwide advanced technology node (28nm of less) capacity increased noticeably to 9%.

At the close of 2016, China had thirty new fabs that were under construction or being equipped and/or qualified prior to starting production. These committed new fabs when put into full production will increase China’s relative ranking in total WSpM capacity to second worldwide, surpassing both Taiwan and Korea and only slightly less than Japan. 

Note: Capacity in thousands of 8-inch-equivalent wafer starts per month. WF probability =/> 1.0

Comparison of China and all remaining countries’ SPA&T resources, 2016

At the end of 2016 China had 124 semiconductor packaging, assembly and test (SPA&T) facilities in operation, an increase from the total of 123 at the end of 2015 and 120 at the end of 2014. These 124 facilities represented 23% of the total number of worldwide SPA&T facilities, 31% of worldwide SPA&T manufacturing floor space and 26% of reported worldwide SPA&T employees. As a result, China’s SPA&T facilities continue to rank first in both number of facilities and share of SPA&T manufacturing floor space ( a proxy for potential manufacturing capacity)—notably ahead of Taiwan (23% of worldwide SPA&T space) and Japan (9% of worldwide SPA&T space) for the eighth year running.

Since 2005 China’s existing SPA&T capacity has increased by 101% compared to a worldwide increase of 20%. During the same period China’s planned and existing SPA&T capacity has increased by 121% versus a worldwide increase of 25%. Since 2005 China’s existing SPA&T capacity increased by 15,869 K sq. ft. versus a worldwide increase of 16,558 K sq. ft., representing the largest increase of the top ten SPA&T countries (five of which have seen a  decrease in SPA&T capacity).

Comparison of China and all remaining countries SATS share of SPA&T capacity, 2016

China’s SPA&T capacity continues to be more concentrated in the SATS sector than that of other regions. In fact, 67% of China’s SPA&T manufacturing floor space and 67% of manufacturing employees were dedicated to the SATS sector versus 58% and 54% for all other countries. However this is a decrease from 70% of SPA&T manufacturing floor space in 2015. Nine of the ten largest worldwide SATS companies had one or more facilities in China during 2016 for a total of 25 out of the 96 top ten SATS facilities worldwide. These 25 facilities accounted for 36% of the top ten SATS manufacturing floor space worldwide. With Amkor’s acquisition of J Devices at the end of December 2016 all ten of the largest SATS companies worldwide now have one or more facility in China.

Jingsu Changjiang Electronics Technology (JCET), the largest of the Chinese SATS companies, grew by 38% to remain the fourth largest worldwide SATS company in 2016, up from sixth in 2014. A second Chinese SATS company, Tianshui Huatian Microelectronics (TSHT), grew by 36% to become the seventh largest worldwide SATS company in 2016, up from ninth in 2015. More noticeably, a third Chinese SATS company, Tongfu Microelectronics (TFME formerly Natong Fujitsu Microelectronics [NFME]), grew by a dramatic 114% in 2016 to become the eighth largest worldwide SATS company, up from fourteenth within the top twenty worldwide SATS companies in 2015.

China’s semiconductor manufacturing capacity by province & region, 2016

There are at least 293 semiconductor wafer fabrication or packaging and testing plants spread across 20 different provinces in China. They are spread from Jilin in the North to Guangdong in the South and from Zhejiang in the East to Sichuan in the West across an area of about 1,700,000 square miles.

To help you put this map in perspective, China is about the same size as the US, at 102% of area, and has 4.3 times the population (1,336M/309M), but only 83% of arable land (1,479/1,780 sq km) and almost 13 times the rural population (708M/55M). At the end of 2016, China had at least 293 semiconductor plants compared to 313 in the US.

East China (or the Yangtze River Delta) has the greatest concentration of plants, with more than 56% of wafer fabrication and 62% of packaging and testing capacity. The majority of plants are located in Shanghai, Suzhou, and Wuxi. These plants accounted for more than 50% of China’s IC industry revenue in 2016.

China’s semiconductor industry activity in the four regions of Central, Southwest, Northeast and Northwest China has increased by more the 500% in the last several years to account for 25% of China’s capacity in 2016.

Contact us

Jianbin Gao

China TMT Leader and Private Equity Group Central China Leader, PwC China, PwC China

Tel: +86 21 2323 3362

Conall Dempsey

Global Technology Leader, Partner, PwC United States

Tel: +1 (215) 518-0149

Follow us