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Technology

China chip drive far short of 'Made in China 2025' goal: report

Local output will meet only 21% of demand in 2024, US research firm warns

A Kunpeng 920 chipset designed by Huawei's HiSilicon subsidiary on display at Huawei Technologies' headquarters in Shenzhen, China.   © Reuters

TOKYO -- Chinese-made chips will account for just 20.7% of the national market in 2024, well below the 70% target in its "Made in China 2025" initiative, according to American research firm IC Insights.

China-based production of integrated circuits, which include central processing units and memory chips, is projected to more than double by value between 2019 and 2024 to $43 billion, which will equal about 8.5% of the global market.

The forecast of a 17% compound annual growth rate for the period comes amid a national push to manufacture chips at home as the U.S. cracks down on Chinese tech giants, particularly Huawei Technologies, that rely on American chips.

But the world's largest chip market is expected to reach $208 billion in 2024, IC Insights said.

Companies based outside mainland China, including Samsung Electronics, Intel and Taiwan Semiconductor Manufacturing Co., produced more than 60% of the China-made integrated circuits by value in 2019. IC Insights sees them accounting for at least half of Chinese output in 2024.

The Sino-American tech tensions could drive China to accelerate efforts to increase its self-sufficiency. With Washington tightening restrictions on chip shipments to Huawei, Shanghai-based Semiconductor Manufacturing International Corp., a Huawei supplier, is stepping up capital investment to help fill the gap.

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