China’s automotive semiconductor market surged to $ 419.15 billion in 2024 from $ 280.81 billion in 2020, registering a CAGR of 8.9%, according to a recent MarketsandMarkets report. This growth underscores China’s ambition to lead the global automotive tech transformation, fuelled by its position as the world’s largest electric vehicle (EV) market and robust state support for new energy vehicles.
The shift toward electrification and software-defined vehicles (SDVs) is rapidly increasing semiconductor content per vehicle, with automakers pushing innovations such as advanced driver assistance systems (ADAS), over-the-air (OTA) updates, and AI-driven infotainment. This transformation is redefining vehicle electronics architecture, moving from distributed to centralized E/E systems and domain controllers—making high-performance chips more essential than ever.
Microcontrollers: Backbone Of Automotive Intelligence
Microcontrollers (MCUs) remain the largest segment in China’s automotive semiconductor space, supported by a mature manufacturing base and strategic government policies such as ‘Made in China 2025’ and the National Integrated Circuit Industry Investment Fund. These policies have channelled over $ 29 billion into domestic chip development.
MCUs are central to real-time decision-making across engine, battery, safety, and infotainment systems. As EV sales in China crossed 11 million units in 2024, demand for high-performance, automotive-grade MCUs has grown sharply. Manufacturers like SMIC have achieved production maturity at the 14 nm node with yields of 90–95%, while firms like Midea Group, GigaDevice, and AutoChips are pushing innovation to next-generation MCU platforms.
With localized MCU production gaining momentum, China is strategically reducing its dependency on foreign suppliers while reinforcing supply chain resilience through semiconductor clusters in Shanghai and Suzhou.
Power Semiconductors: Fastest-Growing Segment
Power semiconductors are experiencing the fastest growth in China’s auto chip market, driven by the electrification of mobility and increasing penetration of high-voltage EV platforms. Electric vehicles require significantly more power chips than internal combustion counterparts, primarily for drive inverters, DC-DC converters, and onboard chargers.
Silicon carbide (SiC) and gallium nitride (GaN) technologies are emerging as key enablers of performance and efficiency. SiC modules, critical for 800V vehicle platforms, are gaining widespread adoption, while GaN devices, known for ultra-low switching energy, are finding traction despite manufacturing challenges. The push for ultra-fast charging, ADAS, V2G capability, and next-gen infotainment is driving automakers toward SiC/GaN-based solutions to optimise powertrain efficiency and reduce vehicle weight.
Crucial Re-export Hub
Hong Kong remains the largest importer of China’s integrated circuits, acting as a global distribution node. In FY24, China exported nearly 89.4 million IC units to Hong Kong. These components are then routed to global markets or used in regional electronics manufacturing.
This trade is underpinned by Hong Kong’s low tariffs, efficient logistics, and financial infrastructure, enabling it to serve as a semiconductor trade bridge between China and the world. The city also plays a growing role within the Greater Bay Area’s high-tech ecosystem, strengthening its position in the global chip supply chain.
China’s expanding influence in automotive semiconductors is not just about scale—it is structural, policy-backed, and innovation-led. With domestic champions gaining ground in microcontrollers and next-gen power semiconductors, and with trade hubs like Hong Kong enabling global integration, China is well-positioned to lead the future of intelligent, connected, and electric mobility.
As chip content per vehicle rises and software continues to define car functionality, the competitive edge will lie with nations that control both innovation and execution—and China appears determined to do both.
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