China, for the first time, has accounted for over half of the global semiconductor market, but the Asian economy is too dependent on foreign suppliers for associated products.
Clocking a 8.7 percent growth, the Chinese market generated 52.5 percent of worldwide semiconductor consumption last year, which saw an overall decline of 3 percent, according to a PricewaterhouseCoopers report released Thursday.
China's growth was fueled by high demand for smartphones and tablets across the globe, and its dominance would continue with its market share projected to hit 60 percent by 2017, said Raman Chitkara, PwC's global technology and semiconductor leader, in a China Daily report.
"One of the major reasons why China has grown so big in semiconductor consumption is that the country is rising to become the world's capital of electronic manufacturing," Chitkara said. The Asian economic power now accounts for almost 90 percent of global PC production, more than half of television manufacturing, and over three-quarters of mobile phone and digital camera production, he noted. "These items tend to have a higher semiconductor content."
According to the PwC report, however, no local company is among the top 30 semiconductor suppliers to China, with the majority comprising multinational corporations such as Samsung Electronics, Intel, and Qualcomm.
Noting that semiconductor manufacturing is a complex process, Chitkara said China--despite its large footprint--was still in its infancy in this market and its domestic players will need time to catch up.
The PwC report also noted that the country accounted for 34.2 percent of global electronic equipment production in 2012, up by 2 percent over the previous year, and was expected to increase its share to over 40 percent by 2017.