CINNO: China's semiconductor industry investment in the first half of 2024 fell 37.5% year-on-year, and the market tended to be rational

According to CINNO Research statistics on August 23, the investment amount of China's semiconductor projects from January to June 2024 was approximately RMB 517.3 billion (including Taiwan, China, the same below), a year-on-year decrease of 37.5%, and the scale of investment in the semiconductor industry has declined.

According to the CINNO report, in 2024, after a long period of market adjustment, China's semiconductor industry has gradually shown a trend of recovery and growth. At present, the overall domestic macroeconomic situation has stabilized and rebounded, and the downstream demand market has been boosted to a certain extent. The market attention in fields such as artificial intelligence, XR and consumer electronics has continued to increase. In the first half of 2024, although the investment amount in the domestic semiconductor industry decreased year-on-year, it also released a signal that the market is becoming more rational. In addition, the accelerated construction of domestic wafer fabs has brought growth momentum to domestic semiconductor equipment and materials. In the future, with breakthroughs in technological innovation and accelerated domestic substitution, the domestic semiconductor industry will continue to develop upward.

Attached is the breakdown of funds flow within the semiconductor industry:

The main flows of investment funds in China's semiconductor industry from January to June 2024 are as follows:

• Wafer manufacturing, the amount was approximately RMB 246.8 billion, accounting for approximately 47.7%, a year-on-year decrease of 33.9%;

• The investment in chip design was RMB 110.4 billion, accounting for approximately 21.3%, a year-on-year decrease of 29.8%;

• The investment in semiconductor materials was RMB 66.81 billion, accounting for about 12.6%, a year-on-year decrease of 55.8%;

• The investment in packaging and testing was RMB 70.19 billion, accounting for about 13.6%, a year-on-year decrease of 28.2%;

• The investment in semiconductor equipment was RMB 24.66 billion, accounting for approximately 4.8%, an increase of 45.9% year-on-year.

From the perspective of the regional distribution of semiconductor industry investment, a total of 23 provinces and cities (including municipalities) are involved, among which Taiwan Province and Jiangsu Province account for more than 10% of the investment funds; the top five regions in terms of investment funds account for about 78.6% of the total; from the perspective of the distribution of domestic and foreign capital, domestic capital accounts for 90.9% and Taiwanese capital accounts for 9.1%.

Looking at the semiconductor industry materials field, according to statistics, from January to June 2024, China's semiconductor industry investment funds by project category, silicon wafer investment accounted for the highest proportion, accounting for about 48.9%, and the investment amount reached RMB 32.73 billion; Sic/Gan investment accounted for about 16.9%, and the investment amount reached RMB 11.35 billion.

In general, as semiconductor product inventories gradually return to reasonable levels and terminal market demand gradually picks up, especially with the increase in semiconductor demand in areas such as smartphones, servers, automobiles and PCs, as well as the rapid development of AI and the Internet of Things, the global semiconductor industry will gradually recover and re-enter a steady growth development channel. Although there are still uncertainties and challenges in the future, we remain optimistic about the overall development prospects.