China Rapidly Develops Semiconductor Foundries with More than US $10 Bn Expenditure in 2018

18 Jan
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In the recent years, China government proactively raises Chinese domestic semiconductor industry with stunning capital budgets. According to reports of Semiconductor Equipment and Materials International (SEMI), Chinese semiconductor industry in 2018 will spend on foundries more than US$10 billion.

SEMI’s report further pointed out that China’s total expenses in semiconductor equipment and materials from 2004 to 2014 surpassed US $70 billion. In this duration, both non-Chinese manufacturers and Chinese domestic manufacturers synchronized their capacity expansion. Therefore, currently, mainland China’s packaging equipment expenditure occupies more than one-third of global market share.

Nonetheless, although China has established many important wafer foundries from 2004 to 2014, SEMI expressed that until the end of 2014, Chinese-built wafer foundries capacity still did not reach 10% of worldwide market capacity yet, and Chinese advanced manufacturing processes have remained far behind other nations’ manufacturers. To tackle this issue, Chinese government announced National Integrated Circuit Industry Development Outline. Its goal is to continue developing Chinese semiconductor industry supply chain’s manufacturing capacity and technology in order to match the international levels.

As China government strategizes integrated circuit industry as the strategic leading industry, related investment funds are properly arranged, and China’s semiconductor wafer foundries investment will swiftly increase. SEMI predicts that in 2018, China’s wafer foundry equipment related expenditure might surpass US $10 billion. In the coming years, expenditure will maintain at this level.

Although Chinese domestic wafer foundries have been built quickly and proactively, SEMI predicts that in the future China semiconductor firms and Chinese domestic supply chain might face challenges such as intellectual property right protection, talent hunting, and over-dependence on the governmental support. If these firms want to maintain their market competitiveness, they should build more solid and reliable business models and related technology advantages, and avoid merely relying on price wars.