Where are the investment opportunities in the semiconductor industry market? Recently, at the 2023 Intel China Strategic Media Communication Conference, Wang Rui, senior vice president of Intel and chairman of China, said that although the global semiconductor industry is now in a cyclical adjustment stage, this does not hinder the long-term improvement of the market.

"Since the beginning of this century, the semiconductor industry has experienced three relatively large cyclical adjustments. The first was around 2000, caused by the Internet bubble; the second was in 2008, caused by the financial crisis; the third is now, caused by the epidemic and various other reasons. Every time the semiconductor industry has experienced a downward adjustment, but such a short-term decline has not affected the growth trend of the semiconductor industry.

As international production capacity continues to shift to mainland my country, international giants such as Intel and Samsung have successively invested in and built factories in mainland my country. At the same time, under the guidance of the integrated circuit industry investment fund, the enthusiasm for the construction of integrated circuit production lines in mainland my country is high, and the demand for semiconductor equipment in mainland my country is huge. Semiconductors are a pillar industry in South Korea, with large size, fast growth, and strong representativeness. It has long maintained its position as the world's largest memory chip producer, with a market share of up to 70%; among the top three semiconductor manufacturers in the world in 2021, South Korea occupies 2 (data source: IC Insights, Korea Customs Service, as of 2021).

Report by China Research Institute of Industry and Information Technology, "In-depth Research on Semiconductor Industry and Forecast Report on Future Development Status and Trends 2022-2027"

Semiconductor Industry Market Analysis Report

With the development of the semiconductor industry, the semiconductor equipment industry has exceeded 100 billion US dollars, of which wafer equipment occupies the mainstream, with a market share of more than 85%. As the world's largest semiconductor market, China's semiconductor equipment market size is close to 200 billion yuan. The global semiconductor industry market size fluctuates, and the severe decline in the memory chip market has led to a decline in the global semiconductor market size, which has resumed growth since 2020. According to data released by the Semiconductor Industry Association (SIA), it reached 555.9 billion US dollars in 2021, an increase of 26% from 2020.

The financing amount of China's semiconductor industry has reached the trillion yuan level, the international situation is changing, and geopolitical issues are obvious, and the bottleneck problem is becoming increasingly prominent. In addition to the government's incentives to increase domestic chip production, it is longer than expected. The Russian-Ukrainian war also prompted semiconductor companies to seek alternative sources of materials and cultivate domestic suppliers. Enterprises have been tempered in the hard years of the past two years and have formed stronger resilience in supply chain management.

Today, Intel has also encountered many difficulties on the road to IDM2.0 transformation, especially in the cyclical adjustment stage. Faced with the challenges of transformation, Wang Rui said that the more crisis there is, the more investment should be made in innovation and the future. The transformation process of large companies is long-term and cannot be seen from the results of the moment. Intel promotes through the three major strategies of developing foundry business, leading architecture innovation, and expanding product layout.

In addition, industry insiders said that although China's semiconductor industry has also been slightly affected by the epidemic and other reasons, China is still the world's largest semiconductor consumer market, and data from the National Development and Reform Commission show that China's digital economy has ranked second in the world for many consecutive years. New business models, application scenarios, and growth momentum continue to emerge, driving the high-quality development of China's economy. The scale of China's digital economy will reach 52 trillion yuan in 2023 and 100 trillion yuan in 2032.

my country has introduced preferential tax policies related to semiconductors to further promote the development of related domestic enterprises. As a result, the number of domestic semiconductor-related companies increased significantly in 2020. As of December 2021, the number of domestic chip design companies has increased by 592 from 2,218 in 2020 to 2,810, and the semiconductor industry has grown by 26.7% year-on-year.

The total volume of the semiconductor chip market in mainland China is US$143.4 billion, and the output value of semiconductor chips produced in mainland China is about US$22.7 billion, accounting for about 15.9%, an increase of 5.6 percentage points compared with 2010 (10.2%). With the gradual commissioning of new integrated circuit production lines in China, the scale of China's integrated circuit manufacturing industry will further increase. Therefore, the scale of my country's semiconductor chip market has shown an increasing trend year by year, with a market size of 884.8 billion yuan and a 17% increase in the semiconductor chip market.

Analysis of the prospects of the semiconductor industry

As the digital economy continues to grow, the semiconductor and computing industries will play an increasingly important role. In China's high-quality development process, digitalization and greening are like two-wheel drive, synergistically echoing and promoting each other. Building a better future world is inseparable from digitalization and greening, which are supported by the semiconductor and computing industries.

From the perspective of semiconductor market space, the domestic semiconductor industry market is relatively broad. At present, global semiconductor sales exceed 500 billion US dollars, the market space is large, and the market value of leading companies is generally as high as 100 billion US dollars. The domestic semiconductor industry has the triple advantages of strong policy support, a broad downstream market and engineer dividends. Considering that the current localization rate is less than 10%, the market generally predicts that my country's semiconductor industry is expected to achieve a 15% CAGR growth in the next five years.

At the same time, climate policies such as net zero carbon emission requirements are driving companies to reduce their carbon footprint. End equipment customers may begin to require chips produced near their main markets or assembly sites, thereby increasing regionalization rather than globalization. According to reports, Apple has placed an order for 3nm chips produced in the United States, and TSMC's confirmation of plans to produce 3nm chips in Arizona also provides evidence of this trend.

Semiconductors are closely related to the development of information security. Governments around the world regard them as the backbone industries of the country. The development level of the semiconductor industry has gradually become a symbol of the country's comprehensive strength. Against the backdrop of future sales differentiation, domestic equipment manufacturers still have a large market space. The development of my country's semiconductor equipment industry will develop steadily under multiple restrictions, market competition will intensify, and the imbalance between supply and demand will remain serious. my country's technological level is backward, the process power density is insufficient, and a variety of complex process equipment is needed to supply industrial development.

Of the $22.7 billion worth of integrated circuits manufactured in China, Chinese local companies produced only $8.3 billion (36.5%), accounting for only 5.9% of China's $143.4 billion integrated circuit market. TSMC, SK Hynix, Samsung, Intel, UMC and other foreign companies with chip manufacturing plants in China produced the rest of the chips. The semiconductor market share will increase by an average of 0.7 percentage points per year from the beginning, and by 2025, semiconductors will increase by 3.5 percentage points to 19.4%.

The market size of the global semiconductor industry fluctuates, and the severe decline in the memory chip market has led to a decline in the global semiconductor market size, which has resumed growth since 2020. According to data released by the Semiconductor Industry Association (SIA), it will reach $555.9 billion in 2021, an increase of 26% from 2020.

In 2023, the decline in the global semiconductor market is still inevitable. According to market data, the global semiconductor market size in 2022 is US$573.5 billion, a slight increase from 2021, but the growth rate is declining sharply.

Another analysis agency pointed out that the market size in the second half of 2022 will decline by 10% compared with the first half of the year, and the first quarter of 2023 is expected to decline by about 10% compared with the fourth quarter of 2022. Therefore, many opinions believe that the global semiconductor market will continue to decline in 2023.

In the next few years, semiconductor companies will play a more important role in the global value chain. In fact, billions of dollars in manufacturing investment reflect the economic and strategic importance of semiconductor companies. The "talent war" in the global semiconductor industry has already started, and it will only intensify in the future. With the advent of a new era of semiconductors, retaining and applying talents will become a key factor for companies to win in the competition.

Entering 2023, China's economy is surging. "We are confident about the prospects of the digital economy," said an industry insider. As Intel's China strategy upgrades, we will create value for customers, industry, and society with stronger leadership, more integrated local operations, and deeper local operations. ”

It is expected that the semiconductor chip industry will expand by more than five times in 2030, and the demand for talent will increase exponentially. If the country's investment in integrated circuit projects is fully in place, China will need 700,000 people, while there are only about half of them in China at present, about 300,000. Judging from the talent needs released by integrated circuit companies, R&D and sales are the two parts with the largest demand for corporate personnel. The demand for R&D positions in the semiconductor chip industry is as high as 55%, followed by sales customer support positions, accounting for 18%.

The semiconductor industry research report aims to start from the national economic and industrial development strategy, predict the market prospects of future business, and help customers clear the policy fog and find investment opportunities in the industry. Based on a large amount of analysis and prediction, the semiconductor industry report studies the future development and investment strategy of the industry, provides accurate semiconductor industry market intelligence information and scientific decision-making basis for enterprises to gain insight into opportunities in the fierce market competition, adjust business strategies in time according to the market demand of the semiconductor industry, and select appropriate investment opportunities for strategic investors and company leaders to make strategic plans.