Application-Specific Integrated Circuit in China Trends and Forecast
The future of the application-specific integrated circuit market in China looks promising with opportunities in the telecommunication, industrial, automotive, and consumer electronic markets. The global application-specific integrated circuit market is expected to reach an estimated $21.8 billion by 2031 with a CAGR of 5.7% from 2025 to 2031. The application-specific integrated circuit market in China is also forecasted to witness strong growth over the forecast period. The major drivers for this market are the rising need for specialized and high-capacity chips and the widespread integration of artificial intelligence and machine learning among industries.
• Lucintel forecasts that, within the product type category, semi-custom will remain the largest segment over the forecast period due to its lower complexity and broad range of applications.
• Within the application category, consumer electronics is expected to witness the highest growth due to the increasing use of application-specific integrated circuits in various gadgets, such as smartphones, tablets, and laptops.
Emerging Trends in the Application-Specific Integrated Circuit Market in China
Developments in technology, increased investment from the government, and higher consumer demands from the telecommunications, automotive, and consumer electronics industries are some factors contributing to the growth of China’s ASIC market. Innovations in semiconductor design and fabrication have also become a major focus in the Chinese market, altering the dynamics of this industry. With global competition heating up, Chinese firms are focusing on creating more complex, affordable, and specialized ASICs for both domestic and international markets.
• Movement Towards 5G and Telecom-Focused Solutions: The roll-out of 5G technology is accelerating the demand for ASICs in China. Telecoms require custom-made chips for various products like base stations, smartphones, and data centers. Compared to a general-purpose chip, an ASIC is more performant, power-efficient, and cost-effective. Semiconductor companies in China are now custom-fabricating ASICs for telecom infrastructure, which has led to increased competition and innovation in the industry.
• Growth of AI and Machine Learning: AI is one of the main applications of ASICs with significant growth potential. China’s focus on furthering the automation of cities, self-driving cars, and other forms of industrial automation is driving the need for custom chips for AI, machine learning, and big data processing worldwide. Proprietary AI-specific ASICs like Google’s Tensor Processing Units (TPUs) are being modified and improved by Chinese companies. This trend enhances China’s AI aspirations and reduces reliance on foreign suppliers of ASICs, fostering domestic competition.
• Automotive Industry Transformation: As the demand for electric vehicles (EVs) and self-driving cars rises, the automotive industry in China has become one of the largest consumers of ASICs. These chips are needed for new power-efficient systems, onboard vehicle operating systems, and vehicle communication networks. The Chinese economy is expected to increase its competitiveness in the global chip market due to the rapid evolution of specialized ASICs for EVs.
• Efforts from the Government and Investment: The government of China has greatly invested in strengthening the country’s semiconductor industry, especially in the development of ASICs. These initiatives prioritize domestic semiconductor production and technology, such as the “Made in China 2025” plan. R&D funding for ASIC technologies has enabled domestic innovation in design, manufacturing, and packaging processes. These measures help boost domestic technological capabilities and reduce dependency on foreign technologies in sensitive areas like defense and telecommunications.
• The Integration and Miniaturization of Components: The growing demand for smaller, more efficient devices inspires a higher degree of integration and miniaturization of components within an ASIC. Chinese manufacturers are increasingly developing integrated ASIC solutions that can achieve multiple functionalities on a single chip. This trend helps mitigate size, power, and costs, promoting the increased use of application-specific integrated circuits in mobile devices, wearables, and IoT devices.
As a result of progress in telecom, AI, automotive, and government investments, China aims to gain a competitive edge in the global ASIC market. These developments have led to increased innovation in the country, reduced dependence on foreign suppliers, and the creation of more complex and efficient chip designs. Major industries, from telecommunications to automotive, will be revolutionized.
Recent Developments in the Application-Specific Integrated Circuit Market in China
Though China’s ASIC market was lagging, it has recently experienced growth due to technological advances, government policy support, and market demand. With the country’s increased dependency on semiconductor technologies like 5G, AI, and electric vehicles, ASIC fabrication and design have a promising future. This is part of China’s strategic emergence to achieve semiconductor self-sufficiency, innovation, and advanced manufacturing technology.
• Growth of Specialized Chip Production Capacity Within the Country: Semiconductor companies are investing more money in building facilities that can manufacture chips in China. In the telecom and defense industries, the government wants to implement a plan to limit foreign manufacturers, which is why there is the “Made in China 2025” policy. SMIC (Semiconductor Manufacturing International Corporation) is investing in advanced ASIC production, which is scarce. This is increasing the number of products made in China, while also allowing China to emerge as an innovative hub for semiconductor markets through advanced ASIC design and production.
• Collaborations Between Tech Industry Leaders and Semiconductor Entrepreneurs: Countries like China, which are advanced in technology, like Huawei and Alibaba, are collaborating with new semiconductor firms to create state-of-the-art application-specific integrated circuits (ASICs) for industries such as 5G, AI, and cloud computing. These companies and newer semiconductor firms are combining their efforts to design mission-oriented microchips. This partnership blends existing infrastructure, industry-specific research, and tech development and manufacturing facilities to produce more ASICs. Geographically, this allows China to increase its new capabilities and self-sufficiency while quickly transforming industries with the latest technologies.
• Moving Towards the Development of AI-Specific ASICs: The development of AI applications, particularly in smarter cities, self-driving cars, and robotics, has also established China as a leader in the field. Advancements in AI-based ASICs help Chinese businesses catch up with global players in AI hardware. For example, the Ascend series of Huawei AI chips are tailored to optimize AI and machine learning workloads, thus reducing the country’s dependence on foreign solutions. AI-specific ASICs are now a booming area in China, where companies like Huawei are working tirelessly to create custom chips for specific AI tasks.
• Progress in the Development of Quantum Computing ASICs: ASET’s aggressive strategy on AI cellphone applications is just one example of how builders are cooperating with designers of novel techniques to enhance the competitiveness of new products in the market. A shift towards computing over optics and its relative affordability makes this industry much more accessible to a larger audience, especially in China. The Chinese government is investing heavily in quantum engineering research, and companies are beginning to design custom application-specific integrated circuits for quantum computing applications. This not only strengthens the country’s position in quantum technologies but also enables China to become a new superpower in quantum computing hardware that could transform cryptography and computational research.
• Improvement of ASIC Packaging and Integration Methods: China’s focus on improving ASIC packaging and integration methods is growing with the surge in demand for smaller, faster, and energy-efficient chips. Chinese companies are now able to manufacture high-performance, low-power-consumption integrated chips due to advancements in integration techniques such as 3D packaging and system-in-package (SiP). This enables the incorporation of more complex functions into smaller devices, which is essential for the rapid proliferation of IoT, wearables, and other consumer electronics.
These developments further position China as an emerging hub for ASIC innovation. With efforts focused on increasing self-sufficiency, expanding domestic production, advancing AI and quantum technologies, and increasing chip integration, China is crafting a strong ecosystem to achieve its technological goals. The country’s focus on investing in ASIC R&D and manufacturing is stimulating innovation, increasing self-reliance, and enhancing competitiveness in the global semiconductor marketplace.
Strategic Growth Opportunities for Application-Specific Integrated Circuit Market in China
The application-specific integrated circuit (ASIC) market in China is expected to thrive as a result of advancements being made in certain important industries. This growth potential depends on the anticipated rise in demand for customized chips due to innovations in 5G, AI, automotive systems, and many other fields. With China intending to boost its self-sufficiency in semiconductor production, there are many market opportunities it can exploit due to its focus on ASICs. Here are five major growth opportunities that will propel the future of ASIC development in China.
• Telecommunications: The rapid establishment of 5G infrastructure in China is one of the largest drivers for the growth of ASICs. Important telecom companies are working towards designing specialized chipsets for base station infrastructure, smartphones, and other 5G-enabled devices. Unlike general processors, ASICs are designed to cope with specific primary tasks. Therefore, they are more powerful and energy-efficient. The result is an increased demand for higher-level custom-designed ASICs, which inspire more innovation in the sector. China has taken a strong position in the 5G race, enabling the country to advance in telecom ASICs on a global scale.
• Artificial Intelligence and Machine Learning: There is a growing need for China’s specialized ASICs for AI and machine learning applications that handle complex computational workloads. The Chinese government, along with private businesses, is heavily investing in AI technology, especially in custom ASICs for AI model training, autonomous cars, robots, and smart cities. Huawei and other companies are working on AI-specific ASICs that increase the processing capacity for machine learning workloads. This further reduces dependence on foreign chipmakers. This trend enables China to claim a significant portion of the AI ASIC market, thereby improving domestic and global technological leadership.
• Automotive Industry: The adoption of EVs and self-driving technologies in China is creating opportunities for specialized ASICs. There is a need for AI-specific custom chips for power control, onboard vehicle operating systems, and sensor fusion for autonomous driving. China’s automobile industry, which is accelerating the adoption of EVs, is also increasingly relying on agile development built in for specialized integrated circuits. With rising investment from manufacturers into electric and autonomous vehicles, the need for automotive ASICs will increase sharply in China, making it a great market opportunity for chipmakers.
• Consumer Electronics: The Chinese semiconductor industry has tremendous growth potential in its consumer electronics segments, including the Internet of Things (IoT) and versatile devices. There is a growing need for specialized semiconductor chips with the proliferation of connected devices. These chips are necessary to maximize performance, minimize energy usage, and improve security. ASICs, on the other hand, are key components in the device miniaturization process and multithreading efficiency. ASICs will fundamentally shape China’s consumer electronics industry as the Chinese economy grows within the smart home, wearable, and connected healthcare device markets.
• Quantum Computing: There is significant investment and high growth potential in quantum computing in China, and it is expected that ASICs will be instrumental in this regard. Quantum computing has the potential to significantly increase the processing power of specialized ASICs, pushing the limits of what can be accomplished with quantum computers. Investments made by the Chinese government and private sectors in quantum computing technologies have increased the focus on custom-designed ASICs to meet the requirements of advanced computations. As quantum computing R&D speeds up in China, Chinese ASICs will form the backbone for this technology.
The telecommunications, AI, automotive, consumer electronics, and quantum computing sectors are poised to impact China’s ASIC market greatly. By leveraging these market opportunities, China is likely to become a notable force in the global ASIC industry and, consequently, spearhead innovation, reduce dependence on foreign technologies, and augment the country’s technological sovereignty. Along with the rise of new application sectors comes the rise in demand for specialized chips, and the vast opportunities for ASIC development in China will provide sustained growth for both the domestic and foreign markets alike.
Application-Specific Integrated Circuit Market in China Driver and Challenges
Several technological, political, economic, and legal influences shape the ASIC market in China. These include technological improvements, government initiatives, and self-sufficiency goals in semiconductor fabrication. Nevertheless, there are problems like soaring development expenditures, dependency on foreign competition for sophisticated technology capital, and global economic disputes. These factors, whether positive or negative, construct the circumstances that serve as the basis for analyzing the growth rate of the ASIC industry in China and its long-term implications in the semiconductor business.
The factors responsible for driving the application-specific integrated circuit market in China include:
• Government Expenditure and Regulatory Efforts: In the past, the Chinese government has offered considerable assistance to the semiconductor industry to promote the growth of ASIC manufacturing. Initiatives such as “Made in China 2025” are promoting the local manufacture of semiconductors with a special emphasis on ASICs. These policies aim to eliminate reliance on external technologies while nurturing innovation. Increased spending on R&D, improved tax policies, and building semiconductor clusters are fostering the development of an ecosystem that benefits ASIC companies. This government-funded support will continuously enhance growth in the ASIC market by enabling domestic manufacturers to receive comprehensive financial and strategic aid.
• Progress in AI and 5G Technology: Innovation in artificial intelligence (AI) and 5G technology, in particular, is one of the most important drivers of the ASIC market. Specialized chips needed for processing complex algorithms are essential for machine learning, AI, and autonomous systems. Likewise, the rollout of 5G in China has created a further demand for custom-designed chips that can manage power, speed, and performance. There is an emerging trend of rapid growth within these two sectors, leading to a higher requirement for superior and more efficient ASICs to sustain their frameworks. Such advancements in technology are critical for China’s growth in the global ASIC market, as well as for its efforts to achieve technological supremacy.
• The Growth of the Electric Vehicle and Autonomous Driving Market: China is putting more focus on electric vehicles (EVs), which is boosting the demand for specialized ASICs. EVs need specialized chips to manage and optimize the physical battery, power control, and communication with other components. Similarly, autonomous driving systems require specialized chips to process sensor data and run AI models. Customized ASIC solutions will be in high demand as China emerges as a leader in EV production and autonomous driving technologies. This shift is causing greater emphasis on the production of custom automotive chips, which represents a business opportunity for ASIC manufacturers.
• A New Shift for IoT Devices and Wearable Technology: The increasing adoption of IoT devices and wearables is another key factor driving the growth of the ASIC market in China. The connectivity market is growing, which translates into an increasing need for low-consumption, yet high-performance chips. IoT devices such as smart healthcare devices and wearables are enabled by application-specific integrated circuits (ASICs) that are smaller and energy-efficient. China’s market initiative toward IoT technologies is one of the main reasons why there is increased awareness and demand for ASICs specifically tailored to the requirements of such devices, hence driving market growth.
• Innovations and Self-Sufficiency in Semiconductors: An important consideration for the ASIC market is China’s strategic objective of attaining self-sufficiency in semiconductors. This has gradually shifted the focus toward local ASIC manufacturing. It is driven by a broader government strategy that seeks to enhance domestic capabilities in the design and fabrication of semiconductor chips. As a result, domestic firms are now able to advance China’s semiconductor industry through innovation, which in turn facilitates the production of advanced ASICs for a wide range of applications.
Challenges in the application-specific integrated circuit market in China are:
• Research and Development and Production Cost Projections: One of the industry-specific challenges within China’s ASIC market is the uncontrolled costs associated with development and production. The process of custom chip design and fabrication requires substantial investment in R&D, highly advanced manufacturing infrastructure, and expert personnel. The prerequisites for building and operating semiconductor fabs come at a very high price. On the other hand, Chinese firms face competition from established players with much stronger financial resources. As a result, this makes it challenging for smaller companies to compete in the ASIC market, limiting their growth potential.
• Dependence on Foreign Equipment and Materials: As much as China is closer to accomplishing its goal of semiconductor production, much of its high-end equipment and device materials still rely on foreign suppliers. The fabrication of leading-edge semiconductors requires complex processes that only a handful of companies from the United States or Japan specialize in. Furthermore, this dependency on foreign technology undermines China’s self-sufficiency objectives, particularly in critical areas such as defense or telecommunications. Any disruptions in the supply of crucial equipment or materials could seriously challenge Chinese enterprises’ capacity to meet the escalating demand for ASICs.
• International Trade and Geopolitical Tensions: The trade disputes and geopolitical concerns between China and the rest of the world, primarily the U.S., present considerable barriers for the Chinese ASIC market. Restrictive measures, quotas, and controls over the exportation of semiconductor technologies have limited China’s access to necessary components and devices. Recent actions from the U.S. have restricted Chinese tech companies’ access to advanced semiconductor technology and manufacturing equipment. These geopolitical uncertainties may slow down China’s efforts toward its semiconductor goals and negatively impact the ASIC market.
The factors propelling the growth of the ASIC market in China, such as government investments, emerging technologies, and rising demand in the AI, 5G, and automotive sectors, create a compelling case for expansion. On the other hand, the market also faces significant development barriers, including the high costs of development, dependence on foreign sources, and the geopolitical climate. The market will develop based on the areas China focuses on for development opportunities, thereby strategically shaping the country’s global standing in the ASIC market.
List of Application-Specific Integrated Circuit Market in China Companies
Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies, application-specific integrated circuit companies cater to increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the application-specific integrated circuit companies profiled in this report include:
• Company 1
• Company 2
• Company 3
• Company 4
• Company 5
• Company 6
• Company 7
• Company 8
• Company 9
• Company 10
Application-Specific Integrated Circuit Market in China by Segment
The study includes a forecast for the application-specific integrated circuit market in China by product type and application.
Application-Specific Integrated Circuit Market in China by Product Type [Analysis by Value from 2019 to 2031]:
• Full Custom ASIC
• Semi-Custom ASIC
• Programmable ASIC
Application-Specific Integrated Circuit Market in China by Application [Analysis by Value from 2019 to 2031]:
• Telecommunication
• Industrial
• Automotive
• Consumer Electronics
• Others
Features of the Application-Specific Integrated Circuit Market in China
Market Size Estimates: Application-specific integrated circuit in China market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends and forecasts by various segments.
Segmentation Analysis: Application-specific integrated circuit in China market size by product type and application in terms of value ($B).
Growth Opportunities: Analysis of growth opportunities in different product type and application for the application-specific integrated circuit in China.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the application-specific integrated circuit in China.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
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FAQ
Q1. What are the major drivers influencing the growth of the application-specific integrated circuit market in China?
Answer: The major drivers for this market are the rising need for specialized and high-capacity chips and the widespread integration of artificial intelligence and machine learning among industries.
Q2. What are the major segments for application-specific integrated circuit market in China?
Answer: The future of the application-specific integrated circuit market in China looks promising with opportunities in the telecommunication, industrial, automotive, and consumer electronic markets.
Q3. Which application-specific integrated circuit market segment in China will be the largest in future?
Answer: Lucintel forecasts that, within the product type category, semi-custom will remain the largest segment over the forecast period due to it’s lower complexity and broad range of applications.
Q4. Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.
This report answers following 10 key questions:
Q.1. What are some of the most promising, high-growth opportunities for the application-specific integrated circuit market in China by product type (full custom ASIC, semi-custom ASIC, and programmable ASIC), and application (telecommunication, industrial, automotive, consumer electronics, and others)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.4. What are the business risks and competitive threats in this market?
Q.5. What are the emerging trends in this market and the reasons behind them?
Q.6. What are some of the changing demands of customers in the market?
Q.7. What are the new developments in the market? Which companies are leading these developments?
Q.8. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.9. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.10. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
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