According to the China Semiconductor Packaging Industry Outlook report recently released by SEMI, China has emerged as the world's largest consumer of packaging equipment and materials, generating $29 billion in revenue in the IC packaging and testing sectors in 2017, driven by large-scale government investment.

Based on data collected from July 2017 to the end of January 2018, this report also states that while revenue growth in China's IC packaging and testing industry has slowed in recent years, it remains more mature compared to the domestic IC manufacturing and design sectors.

For this research report, SEMI surveyed 87 semiconductor packaging and assembly companies, including major semiconductor packaging manufacturers in China. Over 100 companies, including leading multinational corporations and emerging Chinese firms, are competing in China's packaging and assembly market. While more than half of China's packaging companies are located in the Yangtze River Delta region, central and western China are emerging as battlegrounds for packaging factories.

Compared to other regions of the world, investment in China’s IC packaging and testing sectors has shown the fastest growth over the past decade, and Chinese manufacturers are receiving strong support from central and local governments to strengthen their production capacity and technological capabilities. Following repeated expansions and acquisitions from 2012 to early 2016, the three major Chinese packaging companies—JCET, Huatian, and TFME—all entered the global top 10 OSAT rankings. Packaging companies such as SPIL, TFME, and NCAP are continuously building new factories.

While China is a major producer of LED products, it is now more prominent in the semiconductor packaging industry. In 2017, China's LED product sector grew to $13.4 billion. In 2017, China accounted for 26 percent of the global packaging materials market, and China's packaging materials revenue is projected to exceed $5.2 billion in 2018.

In 2017, revenue from the Chinese assembly equipment market reached $14 billion, maintaining its position as the world's largest with a 37 percent market share. Assembly equipment manufactured in China accounted for 17 percent of the Chinese market. Along with the rapid growth of the semiconductor packaging market, domestic packaging material suppliers in China are expanding alongside the industry and have begun supplying to leading global packaging companies.

The SEMI report also explains the importance of support, guidelines, and policies from the central and local governments for the Chinese semiconductor industry. The national and local IC funds established in 2014, along with the Made in China 2025 policy, provided a second impetus to the growth of the Chinese IC industry.