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Continuing developments in the fields of 5G communication, electric vehicles (EVs), Internet of Things (IoT) and artificial intelligence (AI) are driving pursuits for innovation across segments in the electronics industry.
China, the global electronics manufacturing hub, has long endeavored to develop its own technology to increase self-reliance and to transform its industries from just handling the final assembly of imported parts. This objective took a more definitive turn in 2015 with the launch of the Made in China 2025 initiative and in the following years, when trade challenges began, the Chinese electronics industry turned to the global south to reduce its dependence on major markets while widening its reach.
As Asia Economics head Louise Loo said in an October 2025 Oxford Economics blog post, “The implications of China’s multi-year pivot from final consumer goods to capital and intermediate goods means that it is increasingly difficult for global manufacturers to exclude Chinese components or play down their Chinese affiliation in supply chains. An entrenched presence in upstream production stages also makes demand for Chinese inputs relatively inelastic to tariff shifts.”
Starting with electronic components
Over the past decades, China’s central and local governments have played a key role in sustaining developments in electronic components manufacturing.
The Ministry of Industry and Information Technology (MIIT), for instance, kept this upstream sector in mind when it released the Pillar Industry Equipment Upgrade and Technology Innovation Guidance. The document, promulgated in 2024, was intended to promote the modernization of specialized tools and machinery used in making components for high-frequency applications to world-class level by 2027.
In addition, the central government supports technological innovation and maintains high tariffs on key components, such as memory chips, to protect domestic industries. The stated target was to reach 68 percent IC localization in 2025, from 52 percent in 2023, with higher rates set in the next two or three years. Progress so far includes Unisplendour’s 28nm FPGA chips and JCET’s 98 percent yield rate for chipset packaging. In other words, a homegrown semiconductor sector has formed, offering entry-level and midrange devices. It is expected to develop further to produce a high-end range in the next two years.
To attract new investment, authorities in Guangdong and Sichuan provinces issued guidelines in 2024 on developing a “low-altitude economy,” including materials, electronic components, software and systems related to economic activities centered around aerial drones. Hunan province followed suit in 2025 and released 10 technology breakthrough plans relating to semiconductors, electronic components and materials.
High-end component innovations
As the largest production base for electronic components, China aims to be at the forefront of technology in the coming years. So far, breakthroughs have been achieved with the introduction of products compliant with miniaturization, surface mounting and integration trends.
Further upstream, upgrades in nano and graphene technologies have resulted in improved component performance. Nano solid-state batteries are an example, which will not ignite at temperatures as high as 200 C. In addition, these have a power density of 300 to 500Wh/kg compared to conventional counterparts that stay in the 200 to 300Wh/kg range.
Huawei Lab researchers, meanwhile, came up with new solid-state batteries in mid-2025. These units can support 3,000km travel with only five minutes of charging. They can ensure normal operation in temperatures as low as -30 C, retaining 85 percent of capacity.
Xidian University is working with the Institute of Physics, Chinese Academy of Sciences and the Huawei Central Research Institute on a graphene layer on polycrystalline diamond substrate. Intended for use in gallium oxide chips, considered the next-generation semiconductor devices, this material will guarantee ultrahigh voltage, high heat dissipation and long operating life but at a low cost.
This team has applied for 23 invention patents, including eight Patent Cooperation Treaty (PCT) international patents, and will continue to pursue R&D to accelerate the industrialization of this technology in the next two years. The goal is to break the monopoly of the US and Japan in the semiconductor field.
Market statistics
China leads in the entry-level and midrange brackets in the electronic components sector.
This product category reached $2.6269 trillion in 2024, rising by 10.1 percent over the previous year, according to Chinabaogao, and is estimated to have hit $2.7583 trillion in 2025.
The same source said that the components industry registered a modest 4.6 percent year-on-year increase in 2022 despite the COVID-19 pandemic and went on to maintain two-digit growth between 2019 and 2024, a trend expected to carry over to 2026 and 2027.
Growth drivers
Chinese manufacturers of electronic components attribute the market boom to the fast development in the spheres of 5G communication, EVs and AI.
By April 2025, there were a total of 4.439 million 5G base stations in China, accounting for 60 percent of global installations, according to the China-based People’s Posts and Telecommunications News. In addition, commercialization of 5G-Advanced reached a new milestone, with more than 300 cities covered by this network. This is while the development of 6G communication is underway. This next-generation mobile wireless technology supports 1Tbps peak transmission speed and 1µs latency.
In the EV sector, IDC said that China’s total sales volume was nearly 15 million units in the first half of 2025, expanding by more than 20 percent over the same period in the previous year. A two-digit growth is forecast to be maintained in 2025 to 2029, with the volume reaching 25 million units at the end of the period.
In the rapidly broadening AI cloud market, China’s share reached $3.09 billion in the first six months of 2025, according to Omdia. Based on estimates for the entire year, the increase is an astounding 148 percent over 2024. By 2030, the value is projected at $26.8 billion.
Optimism despite challenges
Many Chinese manufacturers of electronic components remain hopeful of a better situation in 2026 and 2027 than a 2025 that was rife with uncertainty from regional conflicts, higher tariffs and technological barriers. They have shifted attention from the US market to South America, Europe and the Middle East, with some setting up factories in Southeast Asia and South America.
