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FDI In Semiconductors: Where Are Companies Investing?

China will become the world’s leading semiconductor superpower on the basis of its growing domestic demand for the chips, according to GlobalData thematic research. The semiconductor industry will double in size to more than $1trn by 2030, and China will account for approximately 60% of that growth, according to the Semiconductor Industry Association and Boston Consulting Group.

However, China’s long-standing ambition to become the leader of the Fourth Industrial Revolution may depend upon how self-sufficient in chip production the country will become by 2030. At present, China consumes around 40% of all chips made globally, while being only 12% self-sufficient, according to GlobalData. The country’s requirement for semiconductors reflects its leading position in the development of smart, connected environments commonly known as the internet of things (IoT).

GlobalData research found Chinese patents declined significantly in January and April 2022. This is likely because of China's economic and public health situation, specifically the Covid-19 lockdowns and the associated costs for businesses, especially those making hardware. However, patents for semiconductors have also reduced in the US, Japan, South Korea, Taiwan and Germany in 2022, perhaps demonstrating an inflection point at which semiconductor technology is reaching its maturity.

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