China is set to become the world’s largest semiconductor equipment market next year for the first time, outstripping Taiwan, propelled by aggressive equipment investments by Tsinghua Unigroup Ltd (清華紫光) and other Chinese foundry companies, the international trade group SEMI said yesterday.
China is expected to boost its equipment investment next year by about 21 percent year-over-year to US$14.04 billion, outpacing Taiwan’s US$11.64 billion and South Korea’s US$10.47 billion, SEMI’s latest forecast says.
However, Taiwan is to be the biggest spender on semiconductor equipment this year, with investment totaling US$12 billion, it said.
“Supported by the government, China has been investing heavily. It is worth monitoring whether the investments will translate into a meaningful output and whether their business models will be sustainable,” SEMI Taiwan director of industry research and statistics Clark Tseng (曾瑞瑜) said by telephone.
Tsinghua Unigroup is to spend a big chunk of its investment next year on NAND flash memory chip capacity, although only a small portion of the money would be used to develop DRAM technology as the company was in the early stage of shaping its team, Tseng said.
Tsinghua Unigroup on June 30 said that it had decided to create a DRAM business group and appointed Charles Kau (高啟全) as chief executive officer of the new unit.
Kau was former chairman and president of Nanya Technology Corp (南亞科技), Taiwan’s biggest DRAM chipmaker.
Tsinghua Unigroup decided to develop its own DRAM manufacturing technology and form a research and development team, as no Taiwanese, US or South Korean DRAM companies would license their technology, the Chinese-language Economic Daily News reported yesterday.
China’s Semiconductor Manufacturing International Corp (SMIC, 中芯) is to expand its investment in 14-nanometer (nm) technology, a crucial step for China to fulfill its ambition of playing a key role in the world’s semiconductor industry, Tseng said.
Other Chinese chipmakers are to expand 28-nanometer capacity and less advanced technology, exacerbating the supply glut of 28-nanometer chips, he said on the sideline of a news conference promoting the annual SEMICON Taiwan trade show in Taipei.
Taiwan is expected to see a decline next year in equipment spending as local memory chipmakers remain conservative about capital spending, given the ongoing industry slump, Tseng said.
However, Taiwan Semiconductor Manufacturing Co (台積電) is likely to spend as much as US$10 billion next year to fund the expanded production of advanced chips, including 7nm and 5nm chips, he said.
The global semiconductor industry is gradually recovering in the second half of the year amid falling supply chain inventories, but the recovery pace is falling short of SEMI’s expectations, Tseng said.
Overall, world semiconductor equipment spending next year is expected to rise 7 percent annually to US$55.82 billion from this year’s US$52.1 billion, slower than a double-digit percentage growth estimated earlier by SEMI.
The annual three-day SEMICON Taiwan show at Taipei Nangang Exhibition Center Hall I, which opens tomorrow, has attracted more than 700 companies, SEMI said.
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