Advanced chip design is a key driver for big data processing, artificial intelligence, and high-performance computing. U.S. firms make up 46 percent of global chip design sales and a remarkable 72 percent of chip design software and license sales. The revenues from these sales serve as a basis for continued investments in R&D, preserving the U.S. lead in the field of semiconductor design.
Major U.S. chip design-related firms, such as AMD, Broadcom, Intel, Nvidia, Qualcomm, Cadence, Mentor Graphics, and Synopsys, lead the semiconductor design industry. Companies like Apple and OpenAI, also design custom chips to optimize power consumption, chip performance, and size.
China is the U.S.’s primary competitor in chip design. In 2024, China’s chip design industry achieved sales of $90.99 billion, increasing 11.9% from 2023. One of the key contributors to this growth was the China Integrated Circuit Industry Investment Fund Phase I and II, which have committed billions of dollars to fabless design companies and integrated device manufacturers. The Fund’s Phase III is operating on an even larger scale, further fueling China’s semiconductor design industry.
Chinese design companies including Huawei’s HiSilicon Technologies, the most profitable and innovative fabless private semiconductor company, Will Semiconductor, Hygon Information Technology, and Giga Device Semiconductor have all increased their sales. Although Chinese design industry sales grew 11.9%, the total sales of China’s top 10 design firms in 2024 were down 3.7% from 2023. This number suggests that these top companies are the tip of the iceberg when it comes to the number of growing Chinese design companies, as China is one of world’s number of chip design companies in the world.
As the graph above from the China Semiconductor Industry Association (CSIA) shows, there were 3,626 chip design companies in 2024, up more than 175 compared to the previous year. At the same time, 20 percent of design companies exceeded 100 million yuan in sales, more than 106 additional firms compared to 2023. Many of these companies probably will go bankrupt. Despite this, the overall growth in the number of firms highlights China’s growing design industry.
Wei Shaojun, Professor at Tsinghua University and Vice President of the China Semiconductor Industry Association (CSIA), acknowledged both the industry’s growth opportunities and challenges. He stated, “Despite external challenges and industry restructuring, China’s chip design still shows strong growth potential. However, to maintain sustained competitiveness, the industry must make greater efforts in technological innovation, product quality, market expansion, and other areas, strive to break through bottlenecks, and achieve leapfrog development.” He also raised future growth opportunities in the design field including international high-end computer chips, domestic demand and applications backed by 1.4 billion people, and a stronger ecosystem with manufacturing foundries. Also, he stressed the need to develop a semiconductor innovation ecosystem within China, not as a follower, with possibility of losing their connectivity with external innovation ecosystem.
Continued competition between the U.S. and China in chip design is not just about semiconductor technology but also staying ahead on global industrial trends and applications. The U.S. needs to maintain leadership in chip design and keep understanding semiconductor design ecosystem in China as it continues to evolve and expand.
For more details on semiconductor design industry in the U.S. and China, refer to our paper “Challenges for the Semiconductor Design Industry: The United States Cannot Take Leadership for Granted” by Sujai Shivakumar, Charles Wessner, and Thomas Howell, “Strategic Importance of Continued U.S. Leadership in Chip Design” by Hideki Tomoshige, and “What RISC-V Means for the Future of Chip Development” by Sujai Shivakumar and Julie Heng, available on the CSIS website.
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Data visualization by Sabina Hung
