China’s chip design progress in 2024

China's semiconductor design industry expands with challenges and new strategies.

: The China Integrated Circuit Design Industry Exhibition highlights the nation's semiconductor challenges and mild growth. Industry revenue increased by 11.9% to $90.9 billion, but only 731 companies earn over $13.7 million, and most still compete on price and relationships. Chinese companies are compelled to innovate due to limited access to global tech and pressure from local economics. Collaborations with foundries and foreign companies offer some positive prospects for growth.

The China Integrated Circuit Design Industry Exhibition (ICCAD) serves as a key event for China's semiconductor design sector, showcasing developments and future directions. In the past year, China's semiconductor design companies have grown by 175 to 3,626, achieving industry revenue growth of 11.9% to $90.9 billion, but 87.9% of these companies have fewer than 100 employees, highlighting a skew in revenue distribution with most companies earning below $13.7 million.

Despite an increase in industry revenue, China's growth rate trails the predicted global rate. This year's growth stands at 11.9%, significantly lower than the global projection of 19% for 2024. The industry faces challenges from high talent wages and customer demands for lower prices, constraining many firms to the low-to-mid end market. Some companies are considering expanding abroad to capture higher margins and more profitable opportunities.

Collaboration between Chinese design companies and their foundry partners shows progress in internal synergy. Despite international restrictions, Chinese firms continue to gain limited access to overseas technologies through companies like TSMC. Professor Wei Shaojun suggests that China should focus on innovation in architecture and materials, rather than lamenting restricted access to global technology, to overcome these challenges and potentially lead the industry by 2025.

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