It is estimated that in the next five years, China’s integrated circuit industry will “stand firm,” said Zhao Weiguo, chairman of the Tsinghua Unigroup, China’s top state chip manufacturer, The Paper reported.

According to Zhao, the global integrated circuit industry’s total output value last year was about US$410 billion, and is expected to reach US$450 to 470 billion. In this context, “China’s chip industry has opportunities for development while still facing unprecedented challenges,” said Zhao.

On the one hand, it is subject to various restrictions from foreign countries. On the other, it must face vicious competition at home. An estimated 90% of domestic chip design firms are at the low end and not profitable.

Diao Shi, co-president of the group, believes that the chip industry is a manifestation of a nation’s industrial system. At present, many devices, design tools and verification methods still rely on imports, while manufacturing and packaging are more restricted by the upstream of the industrial system.

“It (will) take more than 20 years for China to establish a complete chip industry system,” said Diao. But, he added, it will likely have a breakthrough in 10 years when it stakes its own position in the market.