China’s Semiconductor Production Surges by 40% in Q1 2024

On April 22, according to the latest data released by the National Bureau of Statistics of China, the semiconductor production in China surged by 40% in the first quarter, signaling the increasingly dominant position of mature process chips in the Chinese market.

In March alone, the nationwide production of integrated circuits reached a staggering 36.2 billion units, a year-on-year increase of 28.4%, hitting a historic high.

Behind this remarkable growth lies the significant demand from downstream industries such as new energy vehicles.

In the first quarter, the production of new energy vehicles in China increased by 29.2% to reach 2.08 million units; concurrently, the production of smartphones also grew by 16.7%.

In various sectors including automobiles, mainland China widely adopts mature process semiconductors of 28 nanometers and above (with limited usage of advanced processes like 7nm), currently occupying 29% of global production capacity.

In recent years, semiconductor production facilities have mushroomed across China, leading to the continuous expansion of the country’s integrated circuit production capacity. The production in the first three months of this year is nearly three times that of the same period in 2019.

Some researchers point out that one of the unintended consequences of US export controls on advanced chip technology to China may be the surge in investment supported by the state, resulting in overproduction, which could potentially lead China to dominate global traditional chip production.

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