In-depth Analysis of the 2025 Semiconductor Investment Annual Conference: Current Status and Future Outlook of the Chinese Semiconductor Market

In-depth Analysis of the 2025 Semiconductor Investment Annual Conference: Current Status and Future Outlook of the Chinese Semiconductor MarketThe "2025 Semiconductor Investment Annual Conference & IC Top 100 Awards Ceremony," hosted by the Semiconductor Investment Alliance and organized by iCW, concluded successfully in Shanghai on December 14, 2024, at the Shanghai Tower. This annual conference brought together industry elites to discuss the future development trends of the semiconductor industry

In-depth Analysis of the 2025 Semiconductor Investment Annual Conference: Current Status and Future Outlook of the Chinese Semiconductor Market

The "2025 Semiconductor Investment Annual Conference & IC Top 100 Awards Ceremony," hosted by the Semiconductor Investment Alliance and organized by iCW, concluded successfully in Shanghai on December 14, 2024, at the Shanghai Tower. This annual conference brought together industry elites to discuss the future development trends of the semiconductor industry. Han Xiaomin, General Manager of iCW Industry Consulting and Executive Dean of iCW Research Institute, delivered a keynote speech at the conference, providing an in-depth analysis and outlook on the global and Chinese semiconductor markets. She also unveiled the highly anticipated "2024 Top 100 Chinese Semiconductor Companies" list, offering valuable market insights to industry professionals.

Global Semiconductor Market: Slowing Growth, AI-Driven Expansion

The global semiconductor market is currently in a recovery phase. According to the World Semiconductor Trade Statistics (WSTS) forecast, the global market size will reach $626.9 billion in 2024, a year-on-year increase of 19%. However, due to the high base effect in 2024 and the peaking of memory prices, the market growth rate is expected to slow down to approximately 11.2% in 2025, with the market size approaching $700 billion.

The continued boom in Artificial Intelligence (AI) will continue to drive semiconductor market growth, with memory, GPUs, and related ASIC chips maintaining significant growth. However, Han Xiaomin pointed out that, excluding AI-related fields, the broader semiconductor market, including power semiconductors and ICs, is expected to exhibit low single-digit growth.

Significantly, China's position as the world's largest single semiconductor market underwent a substantial shift in 2024. Data shows that in the third quarter of 2024, the US semiconductor market surpassed mainland China to become the world's largest single market. This gap is expected to widen further throughout 2024 and into 2025. Han Xiaomin attributed this primarily to restrictions on the domestic supply chain for advanced computing chips and high-end memory products driven by the current AI boom, while the US is making massive investments in AI infrastructure.

Application Market: AI Servers Lead the Way, Other Sectors Slow Down

From an application market perspective, iCW Consulting predicts a slow recovery in 2025, with continued growth facing pressure. AI servers will continue to lead market growth, and the penetration rate of new energy vehicles will further increase, but the growth rate will be significantly slower than in previous years. AI smartphones and AIPCs (Artificial Intelligence Personal Computers) are in a replacement cycle, and are expected to see moderate growth in 2025.

2024 Top 100 Chinese Semiconductor Companies List: Half Achieved Record High Revenue

Based on years of research data and company revenue figures, iCW Consulting has released the "Top 100 Chinese Semiconductor Companies" list annually, receiving widespread attention from the industry. This year's list (including only Fabless companies and IDM business units, excluding IP companies, design service companies, and foundry business units) shows that the total sales revenue of Chinese chip companies in 2024 was approximately RMB 588.83 billion, a year-on-year increase of 11.7%. The total revenue of the Top 100 companies was RMB 357.33 billion, a year-on-year increase of 25.6%; excluding the memory sector, the growth was 12.1%.

The list shows that 11 companies had annual revenue exceeding US$1 billion (exchange rate 1:7.1), and 66 companies exceeded RMB 1 billion. Among them, 64 companies had revenue growth rates above 5%, 12 companies maintained relatively stable revenue (growth rate between -5% and 5%), and 24 companies experienced revenue decline (growth rate below -5%). Remarkably, 51 companies achieved record-high revenue, more than half of the total number of Top 100 companies.

In terms of geographical distribution, in 2024, the Top 100 companies were distributed across provinces as follows: Shanghai (26), Guangdong (20), Jiangsu (17), and Beijing (12). By city, the distribution is: Shanghai (26), Shenzhen (17), Beijing (12), Suzhou and Wuxi (5 each), Hangzhou (4), Tianjin and Zhuhai (3 each). In 2023, the headquarters of the Top 100 companies were located in 18 provincial-level administrative regions and 29 cities, while their business operations spanned 45 cities, totaling 458 entities. Shanghai and Shenzhen each have over 50 company locations, while Beijing, Chengdu, Suzhou, and Xi'an each have over 20.

Han Xiaomin pointed out that using the metric of "number of non-headquarter company locations / total number of companies with headquarters not located locally" to gauge regional layout intentions, Shenzhen and Shanghai still show the strongest intentions, followed by Beijing and Chengdu. Xi'an, Suzhou, Wuxi, Nanjing, Hangzhou, and Zhuhai also performed well. The abundance of integrated circuit professionals, labor costs, and the maturity of the industry chain all directly influence companies' regional layout intentions.

Foundry and Packaging & Testing Industry: Opportunities and Challenges Coexist

In the foundry sector, as advanced process technology continues to advance, competition in mature process technology is intensifying. iCW Consulting predicts that global foundry revenue will be $135.1 billion in 2024, a year-on-year increase of 19.5%; and is expected to exceed $160 billion in 2025, a year-on-year increase of 18%. Revenue in the mainland China foundry industry is expected to reach RMB 112.5 billion in 2024, a year-on-year increase of 19.4%, and approach RMB 130 billion in 2025, a year-on-year increase of 15%.

In the packaging and testing industry, after facing challenges such as underutilized production capacity, traditional packaging remains sluggish, while advanced packaging technology targeting advanced processes and large chips has seen rapid development. Han Xiaomin stated that the domestic packaging and testing industry is expected to achieve 5% growth in 2024, with revenue exceeding RMB 300 billion.

Integrated Circuit Exports: Interpretation Behind the Trillion-Yuan Breakthrough

Data from the General Administration of Customs shows that in the first 11 months of 2024, China's integrated circuit exports reached RMB 1.03 trillion, a year-on-year increase of 20.3%. Han Xiaomin pointed out that this is not the first time this milestone has been reached (it was achieved in 2022), and considering the development over the years, exceeding RMB 1 trillion again is a normal phenomenon. The main export destinations include Hong Kong, South Korea, Taiwan, Vietnam, and Malaysia, while domestic export locations include Guangdong, Jiangsu, Shanghai, Shaanxi, and Sichuan. Han Xiaomin believes that China's position as the world's manufacturing base remains solid, and apart from advanced processes, the integration of the semiconductor supply chain between China and the global market remains high. This is a long-term process of integration, and although there are regulatory measures, the actual impact will not be particularly significant.

Investment and Mergers & Acquisitions and Overseas Expansion: Challenges and Opportunities Coexist

Regarding investment and mergers & acquisitions, Han Xiaomin noted that in the past year, the number of semiconductor companies with frozen equity has significantly increased, and conflicts between investors and companies have intensified. This is expected to worsen in 2025. While the number of M&A cases has not increased significantly, cross-border M&A driven by business transformation of traditional companies, and industry consolidation-type M&A by state-owned capital platforms, are worth watching.

Regarding overseas expansion of semiconductor companies, Han Xiaomin stated that in the past year, domestic semiconductor companies have accelerated their overseas expansion, with growth in major regions globally. However, the number of overseas subsidiaries in Taiwan and the Cayman and British Virgin Islands has decreased, which is related to limitations on advanced processes and preparations for listing on the Hong Kong or A-share markets.

In summary, the semiconductor market is expected to experience slowing growth in 2025, but AI remains a significant driver. Chinese semiconductor companies have demonstrated strong resilience while facing challenges, with over half of the Top 100 companies achieving record-high revenue. In the future, companies need to actively adapt to market changes, strengthen technological innovation, and actively explore overseas markets to survive and thrive in the fierce competition.

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