China's semiconductor sector reels from
10,000 bankruptcies as hiring frenzy collapses
Income Inequality in China – About 900 million people, or 65% of China’s population, earn less than CNY3,000 (US$410) per month, while the semiconductor industry boasts an average annual salary of CNY340,000, highlighting stark income disparities.
Semiconductor Industry Growth and Challenges – China’s semiconductor investments declined by 22% in 2023, signaling a slowdown after years of rapid growth driven by a 2021–2022 investment boom.
Rise and Fall of Oppo’s Zeku – Oppo’s IC design subsidiary, Zeku, dissolved due to unsustainable R&D costs, contributing to talent dispersal and a sharp decline in semiconductor investments.
Shifts in Semiconductor Salaries and Recruitment – R&D salaries in the semiconductor sector remain high but are stabilizing after the boom years. Digital and analog chip engineers earn over CNY500,000 annually, while process engineers average CNY200,000, with modest increases seen in some roles.
Impact of Industry Overexpansion – Aggressive talent poaching and inflated salaries during the 2021–2022 boom led to oversaturation, with inexperienced professionals entering chip design. The subsequent market downturn has forced companies to adopt more cautious hiring practices.
China’s economy remains on a downward trajectory, with weak domestic consumption. According to The Economic Observer, Shi Li, Dean of the Institute for Common Prosperity at Zhejiang University, estimates that 900 million people—65% of the population—earn less than CNY3,000 (approx. US$410) per month, classifying them as low-income.
Yicai Global, citing data from JW Insights, reported that the average annual salary in China’s semiconductor industry reached CNY340,000 in 2024—100 times higher than the income of the country’s 900 million low-income earners. Ph.D. holders with over 10 years of experience earn an even higher average of CNY1.05 million annually.
The wave of bankruptcies among Chinese chip design houses stems from the 2021–2022 semiconductor investment boom. Analysts highlight technological decoupling, weak supply chains, and fierce domestic competition as driving factors behind the closures that followed rapid, capital-fueled growth.
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