China spent more in the first half of this year on chipmaking equipment to expand its semiconductor capacity than the US, Taiwan, and South Korea combined, indicating how serious the country is about self-reliance in silicon and building its own industry.
According to semiconductor industry body SEMI, China splashed $25 billion on silicon manufacturing kit in the first six months of 2024. And all the signs are that this spending pattern is set to continue in the second half of the year, it said.
These figures were disclosed at the organization's SEMICON trade event held in Taiwan this week, and included the forecast that China will also be the biggest investor in constructing new chip fabrication facilities this year, as reported by Nikkei Asia.
However, SEMI also said it expects significant annual spending growth by 2027 in other regions, including Southeast Asia, the Americas, Europe, and Japan due to a growing global trend for onshoring semiconductor production.
This can be seen in the US with the CHIPS Act providing subsidies for semiconductor companies to set up or expand fabrication plants on American soil, while the European Chips Act has similar goals across the EU.
Onshoring has, however, taken on a particular urgency in China because of the ongoing trade tussle with the US over technology. This has seen Washington ban exports to the country of high-performance chips such as Nvidia's top-end GPUs as well as restrict access to semiconductor design and manufacturing tools that would allow Chinese companies to make their own.
As reported earlier this year, China's chip manufacturing capacity is expected to more than double within the next five to seven years, according to some predictions. Much of this is expected to take the form of so-called mature production processes (typically meaning 28nm or above) still widely used to make less advanced chips for applications such as household appliances and the automotive industry.
"We are seeing China continue to buy all the equipment they can for their new mature-node chipmaking facilities," SEMI senior director of market intelligence Clark Tseng told Nikkei. He added that concerns over further export controls have pushed China-based chipmakers to secure even more equipment in advance.
Perhaps China's semiconductor companies are right to be concerned; it was reported last week that the Dutch government may be planning to impose tighter restrictions on ASML, one of the global leaders in chip manufacturing equipment.
The latest measures are said to include restricting ASML from repairing and maintaining equipment it has installed in Chinese factories by not renewing the licenses that permit such operations once they expire at the end of the year.
Beijing isn't taking this lightly. The state-owned Global Times carried a report a few days ago saying that the Netherlands was risking ASML's place in the Chinese market if it went ahead with the additional restrictions, blaming US political pressure for the move.
China accounted for 49 percent of ASML's sales in thje corp's calendar Q1, and Chinese imports from the Netherlands are said to have "soared" at the end of last year as chipmakers rushed to get their orders for equipment fulfilled.
It isn't just Amsterdam feeling Beijing's wrath over chipmaking equipment. China also threatened Japan with "severe economic retaliation" if its government pushed ahead with new restrictions on selling and servicing semiconductor manufacturing kit to Chinese companies.
One fear in Japan is that the Chinese government could cut off Japan's access to critical minerals essential for automotive production, according to Bloomberg. China is one of the largest sources of some rare earth metals that are used in products including electric vehicles, and Beijing issued new regulations in July that decreed all such resources the property of the state.
However, China's relentless expansion has drawn concern in some quarters. The European Commission is understood to have begun discussions with chipmakers in Europe about China's growing production of commodity silicon, for example, amid worries that it could flood the global market with cheap chips in the future. ®
https://www.theregister.com//2024/09/03/china_spending_big_on_chipmaking/
Created by Tan KW | Sep 03, 2024
Created by Tan KW | Sep 03, 2024