China is trying to supply its own car industry, the world's largest electric vehicle (EV) market, with domestically made chips. As of mid-2025, when this post was written, it had made real progress in power devices, mature-node microcontrollers and ADAS processors, but still imported most automotive chips and lagged in advanced nodes, memory and manufacturing equipment. State funding, industry alliances, national standards and carmakers building their own chip arms are closing the gap, while export controls and geopolitics make it harder.
In the high-stakes race for automotive leadership, China is pressing hard on its semiconductor ecosystem. With EVs filling its cities and automated driving on the horizon, its aim of cutting reliance on foreign semiconductors is both a technology programme and a geopolitical strategy. As Beijing pours billions into it, the road ahead holds challenges that will test that resolve.
Key takeaways (as of June 2025)
- EVs need far more chips than petrol cars, and China sold over 11 million EVs in 2024, so its demand for automotive chips is very large.
- Domestic production covered only a small share of that demand, estimates ranged from about 7% to 15%, with imports supplying most of the rest.
- Policy support includes Made in China 2025, the National Integrated Circuit Industry Investment Fund (the Big Fund) and a national automotive chip standards plan.
- Strengths: power semiconductors (IGBTs, SiC), mature-node MCUs, and ADAS SoCs from firms such as Horizon Robotics.
- Weaknesses: advanced nodes, memory and equipment, made harder by US, Japanese and Dutch export controls tightened in 2023.
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The numbers
The figures below are as published in mid-2025 and have not been re-verified since.
- Market size: a MarketsandMarkets estimate released in June 2025 put China's semiconductor market for automotive at $419.15 billion in 2024, up from $280.81 billion in 2020, an annual growth rate of 8.9%. Treat this figure with caution. Yole Group put the entire global automotive semiconductor market at about $43 billion in 2022, so the MarketsandMarkets number almost certainly measures something broader than chip sales into Chinese cars (the publisher's own pages also describe it in terms of exports).
- EV volume: EV sales in China exceeded 11 million in 2024.
- Chips per vehicle: EVs are commonly reported to use around 1,300 to 1,500 semiconductors each, roughly double a petrol car. Counts vary widely by model and by how discrete parts are counted.
- Self-sufficiency: China was reported to produce only about 7% to 15% of its automotive chips domestically, and to import 83% of its needs as recently as 2020.
From microcontrollers (MCUs) managing battery systems to systems-on-chip (SoCs) running advanced driver-assistance systems (ADAS), demand keeps rising. This dependency is a vulnerability Beijing is determined to remove.
The policy push
Under the Made in China 2025 plan, the government set a target of 70% self-sufficiency in semiconductors by 2025. The strategy has several parts: large state funding, industry alliances and a push for localised supply chains.
| Instrument | What it does |
|---|---|
| National Integrated Circuit Industry Investment Fund (Big Fund) | State-backed equity fund for the chip industry. The original post cited over $29 billion, which matches the second phase (about 204 billion yuan, 2019). The first phase (2014) was about 139 billion yuan, and a third phase of 344 billion yuan was registered in May 2024. |
| China Automotive Chip Innovation Alliance | Industry alliance, reported to have over 70 members, working on standards and collaboration between chipmakers and carmakers |
| National automotive chip standards guideline (MIIT, January 2024) | Targets more than 30 key automotive chip standards by 2025 and more than 70 by 2030, covering reliability, EV chips and information security |
| Industry events | Gatherings such as the 2024 World Automotive Chip Innovation Conference, where carmakers including BYD, Geely and NIO signalled they no longer want to be passive buyers of foreign technology |
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Domestic players stepping up
- Foundries: SMIC and Hua Hong Semiconductor were reported to be stabilising 14 nm-class production, though they trail TSMC by years at advanced nodes. Most automotive chips use mature nodes (28 nm and above), where Chinese foundries are strongest.
- ADAS SoCs: fabless designers such as Horizon Robotics and Axera were reported to have captured about 8% of L2+ ADAS systems in 2023.
- Power devices: BYD Semiconductor, part of the EV maker, was reported to have shipped over 2 billion units and to lead in power chips such as insulated gate bipolar transistors (IGBTs).
- Acquisitions: Chinese ownership of foreign firms such as Nexperia (acquired by Wingtech, completed 2019) and ISSI (acquired by a Chinese consortium in 2015) added expertise in discrete and power devices and in memory.
Later development, added November 2026: in October 2025 the Dutch government used its Goods Availability Act to take control of Nexperia's governance, and a Dutch court moved Wingtech's voting rights to an administrator. The ministerial order was suspended in November 2025 after talks with China, but the dispute over control was still continuing in 2026.
The obstacles
The path to self-reliance is not smooth. China's chip industry lags in advanced nodes below 14 nm, in memory chips and in critical manufacturing equipment. US export controls, joined by Japan and the Netherlands in 2023, restricted access to advanced tools and to 7 nm-class capability, pushing some buyers towards grey-market channels or redesigns for older nodes. This gap, together with the chip shortages of 2021 and 2022, exposed weaknesses that state funding cannot close quickly. Geopolitics looms large, as US-China technology decoupling threatens to isolate China from the global innovation ecosystem it still needs.
China's response
China's response is a balancing act: keep an open, collaborative supply chain while strengthening domestic capability. Carmakers such as GAC Aion and FAW invest in chip R&D, and several OEMs integrate vertically to secure supply. The national plan for more than 30 key automotive chip standards by 2025 and more than 70 by 2030 signals an intent to shape the global playing field.
Foreign suppliers such as Qualcomm, NXP and Infineon still hold strong positions, supplying critical components even as Chinese competitors grow.
Where China stood, mid-2025
| Chip category | Domestic position |
|---|---|
| Power (IGBT, SiC MOSFET) | Strong and growing, led by BYD Semiconductor and others |
| MCUs on mature nodes | Growing, but safety-grade MCUs still largely imported |
| ADAS and cockpit SoCs | Competitive players emerging (Horizon Robotics and others); leading designs depend on foreign foundries |
| Memory | Behind global leaders for automotive-grade parts |
| Manufacturing equipment | Largest gap, directly affected by export controls |
This table is a qualitative summary drawn from the points above, not a measured ranking.
Outlook
China's automotive semiconductor demand is set for strong growth. Globally, Yole Group's 2023 forecast had the automotive semiconductor market reaching about $84 billion by 2028. Investment in silicon carbide (SiC) devices, AI SoCs and connected-vehicle chips will drive smarter, more efficient cars. Success depends on closing the technology gap and managing geopolitical turbulence. If China succeeds, its chipmakers could put pressure on global suppliers' margins, and its carmakers' export growth could reshape automotive supply chains worldwide.
China's semiconductor push is more than a technology story; it is a test of national will. Beijing's drive towards self-sufficiency in silicon will shape not only its car industry but global innovation more widely. The finish line is distant, but China is moving with purpose.
FAQ
Why do EVs need so many more chips?
Battery management, traction inverters, on-board chargers and DC-DC converters add many power and control chips, and EVs also tend to carry more ADAS and cockpit electronics.
Did China reach 70% chip self-sufficiency by 2025?
The figures reported up to mid-2025 were far below that target for automotive chips. Check current data before relying on any self-sufficiency figure.
Which automotive chips is China strongest in?
Power semiconductors such as IGBTs and SiC devices, and mature-node MCUs. Advanced-node SoCs and memory remain the hardest areas.
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