china's chip sector defies shortage fears with market surge
Shanghai, Thursday, 12 June 2025.
despite concerns about a potential semiconductor shortage in 2025, chinese domestic chip sector indices demonstrate robust market performance. the shanghai composite, shenzhen component, and chiNext indices all show gains, signaling the sector’s resilience. investors are keenly observing these trends, as they highlight china’s increasing technological independence. this may indicate future stability in the semiconductor market amid global supply chain challenges. a strong domestic chip sector is crucial for china’s economic stability.
strategic investments and market forecasts
The sector is attracting significant investment. In mid-May, Zhongke Xincit announced a strategic investment of tens of millions of yuan, indicating strong investor confidence [5]. Market analysts predict substantial growth in the coming years. Mordor Intelligence forecasts the FPGA market will reach $11.4 billion by 2025 and $18.76 billion by 2030, with a compound annual growth rate (CAGR) of 10.98% [5]. Grand View Research projects a CAGR of 10.8% from 2023 to 2030, estimating market growth from $10.46 billion in 2022 to $23.34 billion in 2030 [5].
fpga market growth in china
Specifically, the Chinese FPGA chip market is expected to exceed 33.22 billion yuan in 2025 [5]. This represents a CAGR of 22.5% from 2025 to 2030, highlighting the rapid expansion of the domestic sector [5]. Wen Huawu, General Manager of Anlu Technology, notes that the Chinese market demonstrates unique development potential due to supportive policies and the growth of edge computing and automotive electronics [5]. He anticipates that the growth rate of the Chinese FPGA market will outpace the global average in the next few years [5].
automotive chip advancements
China is addressing the critical need for automotive chips. China Electronics Technology Group Corporation (中国电科) is building a reliable supply chain to support the automotive industry [4]. The company focuses on research, manufacturing, and application of critical technologies, aiming to enhance the design and manufacturing capabilities of core components [4]. By 2024, 中国电科 completed independent research and development of over 50 automotive-grade chips across seven categories, with 12 new chips certified and eight key products included in industry recommendations [4]. Their power chips have supported over 2.5 million new energy vehicles, with over 10 million units shipped [4].
u.s. concerns and competitive landscape
The rise of China’s chip sector is causing concern in the United States. David Sacks, a White House official, cautioned that overly strict AI regulations in the U.S. could cede the chip market to China [7]. He stated that if Chinese chips dominate the market in five years, the U.S. will have lost [7]. Sacks also noted China’s advancements in AI models, estimating that they are only three to six months behind the U.S., underscoring the intense competition [7]. This perspective suggests a potential shift in U.S. policy towards promoting its own chip industry to maintain competitiveness [7].