China’s semiconductor investment landscape has become more conservative with investors becoming more cautious and valuations driven by rationality, according to China-based market research firm JW Insights. In March 2023, there were 32 financing activities in the Chinese semiconductor industry, representing a 43% YoY decline and a 7% increase compared to February.
An estimated total of CNY2 billion (approximately $314 million) was raised during March, marking a 72% YoY decline and a 60% monthly decrease. In Q1’23, the Chinese integrated circuit (IC) design sector experienced a 44% YoY reduction in investment activities, with 35 financing events compared to 63 in Q1’22.
In 2022, investment in the Chinese semiconductor industry was mainly focused on analog ICs, logic ICs, semiconductor materials, and semiconductor manufacturing equipment. These four sectors accounted for approximately 45% of the total investment received by the Chinese semiconductor industry. Semiconductor testing equipment was a particular focus, making up 45% of total investment activities in the equipment sector. In March, 34% of Chinese semiconductor funding activities were Series A rounds, predominantly in the semiconductor equipment, analog, and logic IC sectors.
In 2022, the global IC design sector recorded $214.4 billion in revenue, with China accounting for 15%. Despite US sanctions, Chinese chip design houses have remained competitive in consumer ICs, analog ICs, and power semiconductors based on 40nm and more mature process technologies.
