Written by Duoyu

According to data from the National Bureau of Statistics , China's semiconductor integrated circuit ( IC ) output in 2021 was 359.4 billion pieces, an increase of 33.3 % over the previous year ; from January to July 2022 , China's semiconductor integrated circuit ( IC ) output was 193.8 billion pieces, a year-on-year decline of 8.0% . From the demand side, the chip shortage has continued from the beginning of 2021 to August 2022. Although it has eased, it is a structural easing , and the shortage of some high-end chips continues.

As a result, some institutions have expressed pessimism about the development prospects of the semiconductor industry, and some analysts have even significantly lowered their profit expectations for semiconductor companies.

Affected by major events such as the global financial crisis and the chip shortage, the growth rate of semiconductors has shown signs of fatigue, which has directly caused investors and institutions to stop and watch. The once "Internet celebrity plate" has begun to be pulled down from the altar.

The localization rate of semiconductor equipment is less than 20%

In such a market situation, does the semiconductor market have a chance to rise again? Is it still worth pursuing? To find the answers behind these questions, we must first understand the overall competitive landscape of the semiconductor industry.

The semiconductor equipment industry is a typical high-tech barrier industry, which is also a relatively weak field in China. The current global semiconductor equipment market is mainly dominated by foreign manufacturers, and companies in the United States, Japan, the Netherlands and other countries are in an absolute dominant position in the market. The top five companies in the global semiconductor equipment industry in 2020 are: Applied Materials (AMAT), ASML, Lam Research (LAM), Tokyo Electron (TEL) and KLA.

In 2020, the CR5 share of the semiconductor equipment industry reached more than 65%, and the global semiconductor equipment competition landscape was highly concentrated. Among them, ASML focused on lithography equipment and formed a monopoly in the field of high-end lithography machines. Applied Materials (AMAT), Lam Research (LAM), and Tokyo Electron (TEL) have relatively rich product lines; KLA is the leader in semiconductor testing equipment. The localization rate of China's semiconductor equipment is low, and the localization rate of various types of equipment is less than 20%.

Semiconductor growth will slow down to 8.8%

According to WSTS data, 1.15 trillion chips were sold worldwide in 2021, with sales reaching US$555.9 billion, a year-on-year increase of 26%. This is the first time that the global semiconductor market has exceeded US$500 billion. The substantial increase in semiconductor market sales in 2021 was mainly due to the rebound in demand after the epidemic. Although this rebound will continue in 2022, the high growth in 2021 is not expected.

WSTS predicts that global chip production capacity will further increase in 2022 to meet growing demand, but chip sales growth will slow to 8.8% in 2022.

From the demand side, with the advancement of emerging technologies such as 5G, smart cars, AI, robots, and the Internet of Things in recent years, the semiconductor industry has shown exponential growth. 20 years ago, there were less than 100 chip companies in China, but now there are nearly 1,700. The chip shortage in 2021 has made the world realize that chips are the engine of the entire digital world. In the future, with multiple factors such as changes in the global economic environment and geopolitics, competition in the global semiconductor industry will become more intense.

From the supply side, China's semiconductor industry self-sufficiency rate is still relatively low, and overseas leading companies still occupy a monopoly position. In the semiconductor industry chain, China's market share in the EDA field is less than 1%; our market share in core IP, wafers, equipment, IDM and other links is about 9%; China's relatively advantageous packaging and testing link market share is only 21%, and it is still focused on relatively low-end areas. Among them, the gap between supply and demand and the industry's demand for development in a higher-end direction will be the long-term development space and growth potential of the domestic semiconductor industry.

According to statistics from the China Semiconductor Industry Association, China's integrated circuit industry sales in 2021 were 1,045.83 billion yuan, a year-on-year increase of 18.2%. Among them, the sales of the integrated circuit design industry were 451.9 billion yuan, accounting for 43.21%, a year-on-year increase of 19.6%; the sales of the integrated circuit manufacturing industry were 317.63 billion yuan, accounting for 30.37%, a year-on-year increase of 24.1%; the sales of the integrated circuit packaging and testing industry were 276.3 billion yuan, accounting for 26.42%, a year-on-year increase of 10.1%. It is predicted that China's integrated circuit sales will reach 1,138.6 billion yuan in 2022.

Although the overall growth rate of semiconductors will show a slowing trend, with the continued release of demand from downstream application industries, there is still a huge demand gap in the Chinese market. From US$98.6 billion in 2015 to US$192.5 billion in 2021, the average annual compound growth rate of China's semiconductor industry is 11.8%, which directly illustrates the rapid development of the semiconductor industry in China.

Robot "variables" under slowing growth

As one of the sub-sectors that robot manufacturers rely heavily on, will the slowdown in the semiconductor industry also have an impact on the demand for robots? What will be the trend of the semiconductor industry's demand for robots in the future?

• Cleaning robot

• Machine Vision

• AGV/AMR&Combined Robot

• Electric Actuator