In July, the integrated circuit production of industrial enterprises above designated size reached 53 billion blocks, equivalent to an average daily production of about 1.7 billion blocks; In the first seven months, the export value of integrated circuits surged by 99.5% year-on-year, surpassing the full year of 2025; In the first half of this year, integrated circuits became China's largest export commodity... Currently, with the explosive demand for high-end computing chips and storage chips brought about by the global artificial intelligence technology revolution, China's integrated circuit industry is ushering in a new round of high-speed growth.
China has a super large market, a complete industrial system, and abundant talent resources. The integrated circuit industry has a solid foundation, broad space, and abundant momentum for development, and is accelerating its growth into an emerging pillar industry with global competitiveness, "said Li Chao, Deputy Director of the Policy Research Office and spokesperson of the National Development and Reform Commission, at a press conference held in August.
China's' chip 'power in the global landscape
In today's global digital economy, integrated circuits are no longer just electronic components, but the "food of modern industry", the cornerstone of national security, and the focus of great power games. For a long time, the global integrated circuit industry has presented a highly concentrated oligopoly monopoly pattern, with core technology, high-end equipment, and advanced processes mainly held by a few developed countries. However, with the evolution of geopolitics and the increasing demand for supply chain security, this pattern is undergoing profound fission.
As the world's largest consumer market for integrated circuits, China is transforming from a mere "buyer" to a "competitor" and even a "leader". In the past, China faced the dilemma of "chip shortage and soul shortage", with chips heavily dependent on imports and key links in the industrial chain being controlled by others. But looking back at the 2026 milestone, this situation has been reversed.
By 2025, China's integrated circuit production will increase by 10.9%, reaching a historical high of 484.28 billion pieces; The export value increased by 26.8%, breaking through the $200 billion mark for the first time and reaching $201.9 billion. The various links of the industrial chain are constantly improving, and the design and manufacturing capabilities are steadily improving. New breakthroughs have been made in independent research and development of chips, and packaging and testing are gradually approaching the international advanced level. A number of leading enterprises with strong driving ability in the industrial chain and certain international competitiveness have emerged.
Entering 2026, China's integrated circuit exports will experience an explosive growth. According to customs data, the total export value of integrated circuits in China reached 216 billion US dollars in the first seven months of this year, a year-on-year increase of 99.5%. This figure has exceeded the total export value for the whole year of 2025, with a single month export value of 38.74 billion US dollars in July, a year-on-year increase of 116.57%. It is worth noting that in the first half of this year, integrated circuits have become the largest category of export goods in China, surpassing automatic data processing equipment and its components (computer products) and automobiles.

Behind this data is a vivid practice of China's integrated circuit industry seizing global market opportunities and constantly making upward leaps. It proves that China is no longer just an assembly site for low-end chips, but has the ability to export high value-added chips to the world. Whether it is automotive grade power semiconductors or microcontrollers required for the Internet of Things, Chinese "chips" are embedding themselves in the "capillaries" of the global electronics industry with extremely high cost-effectiveness and stable supply capacity.
Since the beginning of this year, the rapid growth of integrated circuit exports is a vivid manifestation of China's semiconductor industry's deep integration into the global supply chain and steady improvement in competitiveness. "Wang Yanhui, founder of the integrated circuit and mobile phone industry portal website Jiweiwang, believes that this consolidates China's position as a global important semiconductor production base and drives the coordinated development of local materials, equipment, packaging testing and other supporting links.
Hu Yang, Chief Analyst of the Electronics Industry at Southwest Securities, stated that the domestic integrated circuit industry has gradually formed a relatively complete and fully functional industrial chain since more than a decade ago. Not only can it fulfill domestic independent needs, but it can also fulfill some overseas needs, even some high-end overseas needs.
Industry insiders predict that as the global semiconductor industry continues to thrive, China's integrated circuit exports are expected to maintain high-speed growth. The latest forecast report released by market research firm Omdia has also significantly raised its growth forecast for the Chinese semiconductor industry in 2026. It is expected that the overall market size in China will reach 812.08 billion US dollars for the whole year, and the year-on-year growth rate expectation will be raised to 92.9%.
Decoding 'China Speed' from Four Dimensions
The sharp increase in China's integrated circuit export data in 2026 is related to the continuous rise in global demand for AI related chips, but the main reason is the continuous optimization and upgrading of the internal structure of China's integrated circuit industry. In 2026, China's integrated circuit industry is presenting four distinct characteristics: technological breakthrough, enterprise efficiency improvement, capacity expansion, and industrial chain security.
Once upon a time, advanced manufacturing processes were the 'Damocles sword' hanging over China's integrated circuit industry. However, under the pressure of external blockade, Chinese companies have demonstrated strong resilience and embarked on a path of differentiated competition.
In the field of logic chips, although cutting-edge equipment such as extreme ultraviolet lithography (EUV) is still limited, leading domestic wafer fabs have achieved large-scale production of 14 nanometer and more advanced processes through multiple exposure and other technological paths, meeting the needs of the vast majority of consumer electronics and industrial control. What is even more impressive is that Chinese companies are accelerating the formation of differentiated competitive advantages in characteristic process fields such as power semiconductors and compound semiconductors (such as silicon carbide and gallium nitride). In addition, in the field of advanced packaging, Chinese companies are bypassing the physical limits of Moore's Law through Chiplet technology and improving the overall performance of chips through system level packaging.

The prosperity of the industry ultimately needs to be reflected in the accounts of enterprises. The 2026 financial season has taught a lesson to all those who are pessimistic about China's integrated circuit industry. As of August 27th, listed companies in the integrated circuit sector that have disclosed their semi annual reports saw a year-on-year increase of 12.8% in revenue for the first half of the year, with a net profit growth of 99%.
The phenomenon of profit growth far exceeding revenue growth not only reveals the explosive demand for AI, but also reveals two deep logics: firstly, the improvement of capacity utilization rate dilutes fixed costs. In the first half of the year, the capacity utilization rate of major domestic wafer foundry enterprises remained above 90%, and some characteristic process production lines even experienced a situation of "difficult to find a single order". Secondly, the optimization of product structure has increased gross profit margin. With the shift of domestic substitution from "usable" to "easy to use", the pricing power of domestic chips in the mid to high end market has been enhanced, breaking away from the past low price competition.
The recovery of market confidence is directly reflected in investment data. In the first seven months of this year, investment in the integrated circuit manufacturing industry increased by 11.5% year-on-year, indicating sufficient momentum for development. Under the guidance of the National Integrated Circuit Industry Investment Fund (Big Fund) Phase I, II, and III, social capital is accelerating its influx into the semiconductor manufacturing sector.
This type of investment exhibits clear structural characteristics. The funds mainly flow in two directions: one is the expansion of mature processes to meet the huge demand of "long tail markets" such as automobiles, industries, and home appliances. The second is the construction of production lines for key equipment and materials. The lithography machine production line of Shanghai Microelectronics, the etching machine base of North Huachuang, and the landing of major silicon wafer and photoresist projects are all in full swing. These investments are filling in the gaps in China's integrated circuit industry one by one.
In the past few years, supply chain security has been a huge stone weighing on the hearts of all Chinese electronics companies. By 2026, this emotion has significantly eased. The domestic integrated circuit equipment and material categories continue to enrich, and the application scale steadily increases, achieving a leap from "single point breakthrough" to "full chain collaboration".
Driven by leading enterprises such as Changxin Technology and Changjiang Storage, the validation cycle of domestically produced equipment in the upstream has been greatly shortened. In the past, wafer fabs dared not use domestically produced equipment for fear of affecting yield; Now, for the sake of supply chain security, wafer fabs are actively opening up their production lines for verification. This "upstream downstream binding" model has provided valuable iteration opportunities for domestic equipment manufacturers. At present, domestic equipment has achieved a high proportion of substitution in processes such as de gluing, cleaning, and heat treatment; In core processes such as coating and development, ion implantation, etc., the localization rate is also rapidly increasing.
Cold thinking behind prosperity
Industry insiders say that while we see achievements, we must also maintain a clear mind. While China's integrated circuit industry is growing rapidly, it still faces industry risks and external challenges that cannot be ignored.

The 'ceiling' of advanced manufacturing processes still exists. Although China has firmly established a foothold in mature process chips, it is still extremely difficult to break through the embargo on core equipment such as lithography machines at the most advanced process nodes of 7 nanometers and below. This directly limits China's performance limits in areas such as top-level artificial intelligence training chips and supercomputing chips. Although Chiplet technology can alleviate some of the problems, the physical gap in the basic process cannot be fully compensated for through packaging. According to statistics from the General Administration of Customs, in the first seven months of 2026, the total import value of integrated circuits in China was 361.8 billion US dollars, a year-on-year increase of 58.3%, with a trade deficit of 145.8 billion US dollars, indicating that China's dependence on high-end advanced process chips is still relatively high.
There are still 'invisible shackles' in upstream materials. Compared to equipment, the localization of semiconductor materials is more difficult and time-consuming. High end photoresist, electronic special gas, polishing solution and other materials have long been monopolized by Japanese and American companies in the market. Although these materials do not account for a high proportion of chip costs, once the supply is cut off, the entire production line will come to a halt. At present, domestic enterprises have achieved breakthroughs in mid to high end photoresist, but in the field of cutting-edge EUV photoresist, the verification progress is still slow and it will take some time before mass production.
The talent gap still faces structural contradictions. The explosive growth of the industry has brought about a huge talent gap. According to statistics from the China Semiconductor Industry Association, there will be a talent gap of over 300000 in the entire integrated circuit industry chain from 2025 to 2026, and it is expected to expand to 500000 by 2030. More serious is the structural contradiction: there is an extreme shortage of senior engineers who understand processes and devices, and leading talents who can construct complex SoC chips are even more scarce. The disconnect between the university training system and the actual needs of enterprises, as well as the problems of long talent training cycles and high turnover rates, remain bottlenecks that restrict the long-term development of industries.
In the face of challenges, the country's strategic determination remains unchanged, and its policy toolbox is constantly being upgraded. The Outline of the 15th Five Year Plan focuses on "integrated circuits" and includes arrangements such as "focusing on strategic areas and weak links in the industrial and supply chains, and taking unconventional measures". In this year's Government Work Report, the integrated circuit industry is clearly listed as the top emerging pillar industry to be built, and a series of deployments such as implementing industrial innovation projects, opening up application scenarios, and strengthening key core technology research and development are proposed, which clarifies the roadmap for promoting high-quality development of the integrated circuit industry in the first year of the 15th Five Year Plan.
The third phase of the National Big Fund has fully launched its investment layout. Unlike the first phase that focuses on manufacturing and the second phase that focuses on equipment materials, the third phase places more emphasis on the combination of "filling gaps" and "forging long plates", with a focus on the most serious "bottleneck" links, as well as cutting-edge application fields such as artificial intelligence and autonomous driving.
The National Development and Reform Commission, together with the Ministry of Finance, the State Administration of Taxation and other departments, has further continued and optimized the tax preferential policies for integrated circuit enterprises. For advanced process enterprises or projects with a line width less than 28 nanometers (inclusive) and an operating period of more than 15 years, they are exempt from corporate income tax for 10 years. This kind of tax reduction directly increases the cash flow of enterprises, making them willing to invest heavily in research and

development.

Next, the National Development and Reform Commission will continue to focus on the deployment requirements of the "Outline" of the "15th Five Year Plan", leverage the advantages of the new national system, make decisive breakthroughs in key core technologies of integrated circuits throughout the entire chain, promote high-quality development of the integrated circuit industry, and make greater contributions to promoting the sustained development of the Chinese economy towards new and better directions, "Li Chao emphasized.