China sets a new record in local semiconductor manufacturing

China sets a new record in local semiconductor manufacturing

China produced over a billion chips every day in June, setting a new all-time record. In fact, Chinese semiconductor manufacturers (including memory and other logic components) made 30.8 billion chips in June, a 43.9% increase over the same period in 2020, according to the National Bureau of Statistics - the Southern China Morning Post reported. However, this value is still not sufficient to satisfy domestic demand, a situation that still forces the country to import the vast majority of the semiconductors it needs.

Credit: SMIC IC Insights recently released its Global Wafer report Capacity 2021-2025 which revealed that Taiwan, South Korea and Japan are the top three nations in the world in terms of semiconductor manufacturing capacity, controlling well over half of global production. Taiwan is home to Taiwan Semiconductor Manufacturing Co., the world's largest manufacturer of logic chips, United Microelectronics Co. and a number of small foundries and numerous DRAM manufacturers, controlling 21.4% of global semiconductor production. According to IC Insights, Taiwanese companies could process up to 4.448 million wafers equivalent to 200mm per month.

South Korea is home to Samsung Electronics and SK Hynix, the world's largest manufacturers of 3D NAND and DRAM memories, as well as several smaller companies. Businesses in the country could process up to 4.253 million 200mm equivalent wafers per month as of the end of 2020 and held a market share of around 20.4%, based on data from IC Insights. Japanese companies no longer produce state-of-the-art logic chips, but the country is home to the world's largest 2D / 3D NAND manufacturing facility operated by Kioxia and Western Digital. Additionally, companies like Renesas still produce chips for various industries (including automotive) and there are numerous factories in the country. Japanese companies could process about 3.281 million wafers equivalent to 200mm per month and control about 15.8% of global semiconductor production.

Credit: IC Insights China is actually the world's fourth largest producer of chips and is largely on par with Japan with its 3.184 million thousand wafers equivalent to 200mm per month and a share of 15.3%. It should be noted that the vast majority of logic chips made in China are processed using nodes at 28nm or earlier, so they cannot be used in devices that require truly high performance. Furthermore, Samsung and SK Hynix, which own plants in China, are not really keen to transfer their cutting-edge technologies to the country.

The Chinese semiconductor industry has made tremendous progress over the past 20 years, a lot it is likely destined to grow further and overtake Japan. However, as Chinese chip makers are at least five years behind industry leaders like Intel, TSMC, or Samsung Foundry, it's unlikely the country will be able to produce advanced CPUs or GPUs any time soon.

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