According to the Nikkei report, as China tries to get rid of its dependence on foreign chip manufacturers, Chinese Mainland's purchase of semiconductor manufacturing equipment has surged.
The report released by SEMI, the global trade organization, on Wednesday pointed out that the sales of semiconductor equipment in Chinese Mainland last year increased by 39% to US $18.7 billion, while the global figure also increased by 19% to a record US $71.2 billion.
Driven by this growth rate, Chinese Mainland has surpassed Taiwan, China to become the world's largest chip manufacturing equipment market. During the COVID-19 lockdown period, the popularity of 5G ultra high speed services and the shopping frenzy of electronic products have driven increased investment in crystal factories around the world.
The accelerated rise of the Chinese market is related to the inclusion of SMIC and other technology giants in the US trade blacklist aimed at suppressing exports to China. SMIC International previously announced a factory construction plan supported by national funds - to build a joint venture factory worth 7.6 billion US dollars in Beijing. For this reason, other participants are eager to invest funds in chip manufacturing equipment.
The global chip shortage also provides favorable conditions for China to increase production. The manufacturing of chips used in household electronic products and automobiles is usually outsourced to China, and although it lags behind technologically advanced chips, the industry has already held a pivotal position in China. According to the Semiconductor Industry Association, headquartered in the United States, the country accounted for 15% of global chip manufacturing capacity last year.
Due to concerns about China's rise, the United States is also taking action to stimulate domestic production. US President Joe Biden signed an executive order in February to review the supply chain of chips and other critical materials. He also proposed providing $50 billion in subsidies for the semiconductor industry.
In response to Washington's push, Intel is expanding its chip manufacturing business in the United States, announcing last month an investment of $20 billion to build two manufacturing factories in Arizona. This processor giant has also launched OEM services to manufacture chips for other companies.
In response, semiconductor equipment manufacturers have increased production. Last year, Tokyo Electronics opened new production buildings in Yamanashi and Iwate prefectures, and Disco, also from Japan, is expanding its factories in Nagano Prefecture.
A disco official said, "Our demand has not decreased, and our facilities have been operating at full capacity since 2020
A source from the Japan Semiconductor Equipment Association said that the market is expected to continue to grow in 2021.
Taiwan, China, China, is the second largest chip manufacturing equipment market, with sales up slightly to US $17.2 billion. As in 2019, investment in OEM factories is also very strong. The world's largest OEM factory has allocated a record $28 billion in equipment this year.
Driven by the growing demand for storage chips, sales in South Korea, ranked third, jumped 61% to $16.1 billion. Samsung Electronics' semiconductor business is expected to invest a record $27.5 billion in capital expenditure in 2021.
According to SEMI data, global sales of wafer processing equipment increased by 19% in 2020, while sales in other front-end segments increased by 4%. Packaging and assembly have shown strong growth in all regions, with a market growth of 34% by 2020, while total sales of testing equipment have increased by 20%.
