Under national support, integrated circuit packaging market is solid

 Recently, the National Development and Reform Commission stated that it will establish a number of national industrial innovation centers in strategic areas such as integrated circuits and advanced computing, and promote the integration of existing innovation resources to create a large platform and large team for industrial innovation. Supporting the development of world-class emerging industrial clusters. The state supports the innovation and development of integrated circuits and other industries, bringing about market opportunities for the development of the industry.

In the development of China's integrated circuit industry, the packaging and testing industry has maintained a steady growth momentum. In particular, in recent years, China's integrated circuit packaging industry has responded to the country’s strategic development in the backdrop of the era of China’s industrial upgrading. It has a sound policy and financial support, and domestic domestic packaging and testing companies have grown rapidly; at the same time, foreign semiconductor companies have made great efforts in the domestic market. Transfer packaging and testing business, China's IC packaging and testing industry is full of life. According to calculations, in 2017, the sales revenue of IC packaging and testing industry in China was approximately 182.2 billion yuan, a growth rate of 16.5%.

Chart 1: Sales revenue and growth in China's packaging and testing industry, 2011-2017 (Unit: 100 million yuan)

In the first three quarters of 2017, the number of IC-related patent disclosures was 628, which was relatively stable compared with previous years. It can be seen that China pays attention to the independent research of the IC packaging industry. After the China New Energy Automotive Electronics Summit Forum in 2017, the "National Integrated Circuit Industry Development Promotion Outline" will be further implemented, and China's IC industry packaging industry will enter the stage of innovation and provide solutions. It can be judged that the research results of China's IC packaging industry will be further expanded in the future.

Chart 2: Table of Changes in the Number of Patent Disclosures Related to China's IC Packaging Industry, 2008-2017 (Units: One)

Increasing demand for integrated circuit packaging in the automotive electronics market

 Automotive electronics is a key terminal area for IC packaging applications. China is an emerging automotive market. The growth of automobile production and sales drives the rapid expansion of the automotive electronics market. In the context of smart cars and the Internet of Things, the growth rate of the automotive electronics market is faster than that of the entire vehicle market. In 2016, the total size of China's automotive electronics market grew by 12.79% to 74.1 billion U.S. dollars. It is estimated that in 2017 China's auto electronics industry will have a market size of approximately USD 83.6 billion.

Chart 3: Market Scale of China's Automotive Electronics Industry, 2010-2017 (Unit: USD 100 million)

  With the growing importance of smart mobile devices in the general trend of the Internet of Things, accompanied by the wave of unmanned and new energy vehicles, the focus of the test packaging market continues to move closer to these two directions. In recent years, the rapid development of new energy vehicles and the rapid growth of downstream applications have directly driven the rapid rise of the automotive electronics industry, and 70% of automotive innovations are in the automotive electronics field. Among them, the proportion of automotive electronics in new energy vehicles has reached 47%, and will continue to increase. The market for integrated circuit products in the automotive electronics industry continues to increase. According to calculations, in 2017, the automotive electronics industry in China needs about 29.1 billion yuan in the market for integrated circuit products. As the carrier of design and solution, the output value of IC packaging will continue to increase.

Chart 4: Demand for Integrated Circuits in China's Automotive Electronics Industry, 2011-2017 (Unit: 100 million yuan)

IC packaging industry will maintain steady growth

  From the above, the application requirements and policies of automotive electronics and other fields will bring about the growth of integrated circuits, especially packaging. At the same time, under the active guidance of the country, companies in the industry are also actively exploring the development of integrated circuits in the automotive electronics field. For example, after Changjiang Electronics acquired Starco.com, it entered the first camp of global packaging and testing, and Tongfu Microelectronics acquired Super. Microelectronics (AMD) Suzhou and Malaysia Penang two 85% of the shares of the test factory, Konagawa Electronic Technology Co., Ltd. signed a strategic cooperation agreement with the government, colleges, etc., to jointly build automotive electronics IC industry base projects. It is expected that by 2023, the scale of China's IC packaging industry will exceed RMB420 billion, and the demand for IC packaging by automotive electronics will exceed RMB18 billion.

Chart 5: Forecast of IC Packaging Industry Size from 2018 to 2023 (Unit: 100 million yuan)

The above data are all from the analysis report of the market for China's integrated circuit packaging industry in 2018-2023, which is published by the Industry Research Institute of Forward Industry.