With the booming development of the digital economy, the chip industry, as the core foundation of the information technology industry, is facing unprecedented development opportunities. Smartphones, 5G communications, Internet of Things, and artificial intelligence serve as the core foundation of the technology industry. Whether in the traditional communication field or in the emerging artificial intelligence and autonomous driving field, the chip industry plays an indispensable role in the era of digital economy.
After a market downturn in 2022, China's chip industry is expected to see a series of technological breakthroughs and industrial upgrades in 2024. From smartphones to 5G communications, and from the Internet of Things to artificial intelligence and autonomous driving, the application scenarios of chip technology are becoming increasingly widespread. Especially after Huawei launched its Mate60 series of phones equipped with the Kirin 9000s chip, the breakthrough in domestic cell phone chips has caused a huge response, marking a solid step forward in independent R&D and innovation in China's chip industry.
In the face of further tightening of AI chip export restrictions by the US, China's chip industry is accelerating the pace of domestic substitution. In terms of process and advanced process semiconductor equipment, although the "necklace" problem still exists, domestic enterprises such as Shanghai Microelectronics has made progress in the localization of photolithography. In addition, with the gradual maturation and standardization of chiplet packaging technology, domestic chip manufacturers have begun to show cost advantages, and are expected to achieve breakthroughs in performance improvement.
With the industrialization of ChatGPT and other new rounds of technology applications, foundry demand maintains its growth momentum. The semiconductor industry cycle is expected to bottom out in the second half of 2024, when the price inflection point will be ushered in. Meanwhile, mainland China's semiconductor equipment market is expected to reach US$37.5 billion, becoming a global growth engine. Driven by the VR/AR market, demand for related chips will also see growth.
Despite the broad market outlook, China's chip industry still faces many difficulties and challenges. Uncertainties in the international political and economic environment, conservative inertia in the market, and the pressure on startups to survive all need to be solved by joint efforts inside and outside the industry. However, with the rise of China's new energy vehicles and intensified competition in key materials such as silicon carbide, China's chip industry is expected to achieve a qualitative leap in 2024. According to industry forecasts, in 2024, mainland China's chip sales revenue will grow 12% to $61.4 billion. In terms of China's application market, the revenue of each application market in China will grow to varying degrees in 2024.
