Vertical Divider

Low Share in Semiconductors and the Huawei Ban Could Spur Further Chinese Subsidization of Semiconductor Fab Capacity
July 01, 2019
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The Chinese government has the growth semiconductor capacity a priority in its 5-year plan and Huawei has been leading the charge. But while the country now had a 13% global share of fabless demand, their IDM facilities represent less than 1% of worldwide capacity. The ban on Huawei, however, may put more pressure on the government to increase their semiconductor investments to minimize future dependence on U.S. supplies. 
 

The 2018 IDM and fabless company shares of IC sales and the total worldwide share of the IC market by company headquarters location show that the U.S. companies’ held just over 50% of the total worldwide IC market in 2018 followed by the South Korean companies with a 27% share, up three percentage points from 2017.  The Taiwanese companies, on the strength of their fabless company IC sales, held the same 6% share of total IC sales as the European companies.  Overall, the South Korean and Japanese companies have an extremely weak presence in the fabless IC segment and the Taiwanese and Chinese companies have a very low share of the IDM portion of the IC market. 
 
Figure 1: 2018 Global IC Company Market Share by Headquarter Location ​

Overall, U.S.-headquartered companies show the most balance with regard to IDM, fabless, and total IC industry’ market share. Driven by a surge in DRAM and NAND flash memory IC sales in 2018, the South Korean-headquartered companies, primarily Samsung and SK Hynix, registered a 26% sales increase, outpacing the Chinese companies by three percentage points last year.  The South Korean and Chinese companies were the only regions/countries to grow faster than the total IC industry (14%) last year.  However, with the memory market expected to show a huge 30% drop in 2019, it is likely that the South Korean companies will go from “first to worst” regarding IC sales growth by company headquarters location this year as compared to last year.  From: semiconductor-digest