China was the world’s biggest chip buyer last year, but it’s still just a bit producer.

In 2020, sales of integrated circuits in China jumped 9% year-on-year to $143 billion, according to a recent report by market research firm IC Insights. But only about 5.9% of the total went to indigenous companies, signaling that the country still has a long way to go to become self-sufficient in chip production.

Around 15.9% of integrated circuits sold on the Chinese mainland last year were manufactured locally. But most of those were made by foreign and Taiwan-based companies with mainland-based factories, including Taiwan Semiconductor Manufacturing Co. Ltd., United Microelectronics Corp., SK Hynix and Samsung, the report showed.

IC Insights estimated that about 60% of integrated circuits sold in China last year were installed in products that were later exported.

Logic chips were the largest segment of China’s integrated circuit market in 2020, accounting for 26% of the total sales, followed by microprocessor with 23%, according to the report.

China aims to domestically produce 70% of its semiconductors by 2025 as part of its broader plan to attain global leadership in manufacturing in high-tech industries like artificial intelligence and information technology. That goal was made against the backdrop of tightening U.S. restrictions on American and overseas chipmakers that hope to ship to Chinese tech firms like Huawei.

Contact reporter Ding Yi (yiding@caixin.com)

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