According to a recent report, in 2018 Chinese manufacturers reached $97.3bn, which is a staggering 20% of global semiconductor revenue. Just to put that in context, the semiconductor industry generated $476.7bn last year worldwide.

The source for this information was an analyst for the Chinese Ministry of Industry and Information Technology, Ren Aiguang. According to their report, the silicon market in China has grown 20.3% annually, which is three times the global average.

One of the key factors behind this growth is undoubtedly the on-going trade war between the US and China, where semiconductors play a crucial role.

Ren also states in his report that the Chinese industry decided to break away from basic, low-margin work like silicon packing and instead focused on higher value contracts such as manufacturing and chip design.

In response to the huge success of China in the technology space, we have seen several US companies ask for an increase in research and development funding from the federal government.

A recent report from the Semiconductor Industry Association states, “While America leads the world with nearly half of global market share, overseas governments are seeking to displace US leadership through huge government investments in both commercial manufacturing and scientific research.”

“For example, the Chinese government has announced efforts to invest well over $100 billion over the next decade to catch up to the United States in semiconductor technology, artificial intelligence, and quantum computing. While China may not meet all its goals, the size and scale of its effort should not be ignored.”