According to data from the National Bureau of Statistics, China's semiconductor integrated circuit (IC) output reached 359.4 billion units in 2021, a 33.3% increase year-on-year; however, from January to July 2022, China's semiconductor integrated circuit (IC) output was 193.8 billion units, a year-on-year decrease of 8.0%. From the demand side, the chip shortage persisted from the beginning of 2021 to August 2022. Although it has eased somewhat, it is a structural relief, and the shortage of some high-end chips continues.
As a result, some organizations have expressed a pessimistic view of the semiconductor industry's development prospects, and some analysts have even significantly lowered their profit expectations for semiconductor companies.
The semiconductor industry has shown signs of slowing growth amid the frequent impacts of major events such as the global financial crisis and the chip shortage crisis. This has directly caused investors and institutions to stop and wait, and the once "hot" stocks have begun to lose their luster.
The localization rate of semiconductor equipment is less than 20%.
Given this market situation, is there still a chance for the semiconductor market to rise again? Is it still worth pursuing? To find the answers to these questions, we must first understand the overall competitive landscape of the semiconductor industry.
The semiconductor equipment industry is a typical high-tech barrier industry, which is also a relatively weak area for China. Currently, the global semiconductor equipment market is mainly dominated by foreign manufacturers, with companies from the United States, Japan, and the Netherlands holding an absolute dominant position. In 2020, the top five global semiconductor equipment companies were: Applied Materials (AMAT), ASML, Lam Research (LAM), Tokyo Electron (TEL), and KLA.
In 2020, the top five semiconductor equipment manufacturers (CR5) accounted for over 65% of the market, indicating a highly concentrated global competitive landscape. ASML, specializing in lithography equipment, holds a monopoly in the high-end lithography machine sector. Applied Materials (AMAT), Lam Research (LAM), and Tokyo Electron (TEL) have relatively diverse product lines; KLA is a leader in semiconductor testing equipment. China's domestic production rate for semiconductor equipment is low, with less than 20% for various types of equipment.
Semiconductor growth will slow to 8.8%.
According to WSTS data, 1.15 trillion chips were sold globally in 2021, generating $555.9 billion in revenue, a 26% year-on-year increase. This marked the first time the global semiconductor market size exceeded $500 billion. The significant increase in semiconductor sales in 2021 was mainly due to a rebound in demand following the pandemic. Although this rebound is expected to continue in 2022, it is not anticipated to reach the high growth levels of 2021.
WSTS predicts that global chip production capacity will further increase in 2022 to meet growing demand, but chip sales growth will slow to 8.8% in 2022.
From the demand side, the semiconductor industry has experienced exponential growth in recent years thanks to the advancement of emerging technologies such as 5G, smart cars, AI, robotics, and the Internet of Things. Twenty years ago, China had fewer than 100 chip companies; now, that number has grown to nearly 1,700. The chip shortage of 2021 made the world realize that chips are the engine of the entire digital world. In the future, coupled with changes in the global economic environment and geopolitical factors, competition in the global semiconductor industry will become increasingly fierce.
From the supply side, my country's semiconductor industry still has a relatively low self-sufficiency rate, with leading overseas companies maintaining a monopoly. Within the semiconductor industry chain, my country's market share in EDA is less than 1%; in core IP, wafer fabrication, equipment, and IDM, our market share is around 9%; even in packaging and testing, where China has a relatively strong position, our market share is only 21%, and this is concentrated in the lower end of the market. The gap between supply and demand, along with the industry's desire to move towards higher-end technologies, will represent the long-term development space and growth potential of China's semiconductor industry.
According to statistics from the China Semiconductor Industry Association, the sales revenue of China's integrated circuit industry reached 1,045.83 billion yuan in 2021, a year-on-year increase of 18.2%. Among them, the sales revenue of integrated circuit design was 451.9 billion yuan, accounting for 43.21% of the total, a year-on-year increase of 19.6%; the sales revenue of integrated circuit manufacturing was 317.63 billion yuan, accounting for 30.37%, a year-on-year increase of 24.1%; and the sales revenue of integrated circuit packaging and testing was 276.3 billion yuan, accounting for 26.42%, a year-on-year increase of 10.1%. It is predicted that my country's integrated circuit sales revenue will reach 1,138.6 billion yuan in 2022.
Although the overall growth rate of the semiconductor industry is expected to slow down, there is still a huge demand gap in the Chinese market due to the continued release of demand from downstream application industries. From US$98.6 billion in 2015 to US$192.5 billion in 2021, the compound annual growth rate of China's semiconductor industry was 11.8%, which directly illustrates the rapid development of the semiconductor industry in China.
Uncertainties surrounding the slowdown in robot growth.
As one of the most crucial sectors for robot manufacturers, will the slowdown in the semiconductor industry's growth also impact robot demand? What trends will the semiconductor industry's demand for robots show in the future?
Cleanroom robots
From the perspective of the semiconductor industry, it exhibits a distinct cyclical nature, resulting in significant fluctuations in demand for cleanroom robots over the past few years. However, in the long run, with continued expansion of semiconductor production capacity, coupled with market demand and process technology factors, the demand for robots will be a long-term positive factor. The Gaogong Robotics Industry Research Institute (GGII) predicts that the compound annual growth rate of demand for cleanroom robots in the semiconductor industry will exceed 19% over the next four years (2022-2025), with sales expected to exceed 7,500 units by 2025.
Machine vision
In the semiconductor manufacturing field, machine vision offers significant advantages in speed and precision. Precise positioning and visual measurement are required in both the front-end and mid-end processes, while back-end processes such as wafer electrical inspection, dicing, AOI packaging, and inspection also heavily rely on machine vision technology. GGII predicts that the semiconductor industry's machine vision market will experience a compound annual growth rate exceeding 33% in the coming years, reaching a market size of over 4.2 billion yuan by 2025.
AGV/AMR & Composite Robots
According to GGII data, in 2021, China's semiconductor industry sold 946 AGV/AMR & hybrid robots, the majority of which were hybrid robots, accounting for over 70%. With the continuous advancement of hybrid robot technologies, they are beginning to see large-scale mass application in multiple fields, with the semiconductor industry being one of the most important application sectors. GGII predicts that in the next few years (2022-2025), the compound annual growth rate of mobile robot (including hybrid robots) sales in the semiconductor industry is expected to exceed 40%, reaching over 3,800 units by 2025.
electric actuator
Electric grippers possess advantages such as high precision, high flexibility, and high intelligence, making them suitable for industry applications requiring high flexibility, agility, and precision. They better meet the needs of precision semiconductor manufacturing, and the industry application penetration rate of electric grippers is increasing year by year. GGII believes that the overall sales volume of electric grippers in China will grow at a compound annual growth rate of over 60% in the next five years, and is expected to exceed 200,000 units by 2025. The semiconductor industry's share of sales will increase year by year, from 8.06% in 2021 to 10.24% in 2025. As a core industry in the "Made in China 2025" strategy, semiconductor manufacturing still faces significant pressure and challenges. While robots may seem insignificant compared to core semiconductor equipment, with the continuous deepening of flexible production and intelligent manufacturing, the intersection between the semiconductor industry and robots will increase. At the same time, we also believe that the high requirements and standards of the semiconductor industry will accelerate the improvement of robot product technology, thereby contributing to the flexibility and intelligence of the semiconductor industry.
