The global semiconductor industry is undergoing significant changes, largely influenced by the rapid expansion of the mainland Chinese market. From 2010 to 2024, mainland China's share of global semiconductor equipment sales increased significantly, from 6% in 2010 to 38% in 2024.
On the other hand, McKinsey reports that Taiwan, South Korea and Japan are losing market share. Taiwan has begun building semiconductor fabs in the United States and Europe, while Japan has few new fab projects, although TSMC is about to build a plant in Kumamoto. Meanwhile, market share in the United States and Europe, the Middle East and Africa remained stable.
Globalization drove the growth of the semiconductor industry from 2010 to 2019, during which time Chinese semiconductor companies continued to expand and local companies grew by about 21% annually. But growth slowed from 2019 to 2023 as U.S. sanctions on Huawei impacted its chip unit HiSilicon.
Even without HiSilicon, China's semiconductor industry still grew 9-10% during this period. Experts believe this growth will continue in the future, and current U.S. tariffs will only exacerbate this trend. China’s growing importance in industries such as electric vehicles (EVs) and commercial drones is further driving its semiconductor goals.
In 2023, China will account for 60% of all new electric vehicle registrations worldwide. At the same time, political tensions between countries have heightened China's desire to build a self-reliant domestic semiconductor ecosystem. China is testing a domestic extreme ultraviolet (EUV) lithography system at Huawei's southern factory in Dongguan. The system uses laser-induced discharge plasma technology and is scheduled for trial production in the third quarter of 2025, with mass production planned for 2026.
