SEMI: This year, global semiconductor equipment shipments from mainland China will surpass those from Taiwan.

The Semiconductor Equipment Manufacturers Association (SEMI) announced that North American semiconductor equipment shipments reached US$2.39 billion in December last year, representing a monthly increase of 16.3% and an annual increase of 27.7%, marking the highest level in nearly 17 years. Last year, global semiconductor equipment shipments totaled US$56 billion, up 40% year-on-year, setting a new all-time high. SEMI noted that as wafer fabrication capacity in mainland China continues to expand, demand for semiconductor equipment will remain robust this year. Global semiconductor equipment spending is expected to keep growing, potentially reaching over US$63 billion—another new high—and increasing by 11% compared to the previous year. Sales of semiconductor equipment serve as an important indicator of the semiconductor industry’s health.

The Semiconductor Equipment Manufacturers Association (SEMI) announced that in December last year, North American semiconductor equipment shipments reached US$2.39 billion, representing a monthly increase of 16.3% and an annual increase of 27.7%, marking the highest level in nearly 17 years. Last year, global semiconductor equipment suppliers’ shipments totaled US$56 billion, up 40% year-on-year, setting a new all-time high.

SEMI stated that, as wafer fabrication capacity in mainland China continues to ramp up, demand for semiconductor equipment will only increase this year. Global spending on semiconductor equipment is expected to keep growing, potentially reaching over 63 billion U.S. dollars—a new high, representing an 11% increase from last year.

Semiconductor equipment sales serve as an important indicator of the semiconductor industry’s economic cycle. As the value of semiconductor equipment increases, it also signals optimism about future order growth in wafer fabrication processes, prompting expanded production capacity and increased capital expenditure on equipment.

In December last year, shipments of semiconductor equipment in North America reached a 17-year high. With a wave of new applications for semiconductor components emerging, the semiconductor industry’s boom this year is expected to be even stronger than last year.

Earlier, SEMI reported that last year’s semiconductor industry output value surpassed US$400 billion for the first time, representing a 20% year-on-year increase. Both the output value and the growth rate set new historical records, bringing joy to equipment and materials manufacturers as well. SEMI is optimistic that this growth trend will continue into 2019, forecasting that the semiconductor industry’s output value will reach US$500 billion in 2019, while the output value of semiconductor equipment and materials will also achieve another four-year consecutive growth record.

SEMI estimates that this year, capital expenditures for wafer fab construction will reach US$13 billion. Once the new fabs are completed, equipment spending in 2019 and 2020 is expected to be substantial. This year, equipment procurement spending will increase from last year’s US$56 billion to US$63 billion.

The materials segment has also driven up the prices of silicon wafers, with average quoted prices increasing by 17% last year, primarily due to the rise in prices of 12-inch silicon wafers. According to SEMI, even if silicon wafer prices were to double, they would still only return to 2011 levels.

SEMI forecasts that global semiconductor equipment spending will grow by a high single-digit percentage this year. Thanks to the substantial expansion of new fabs in mainland China, the mainland’s front-end and back-end semiconductor equipment market could surpass Taiwan’s this year. However, since most of the investment in mainland Chinese fabs comes from foreign manufacturers—with a significant number also involving Taiwanese firms—Taiwanese companies’ competitiveness remains undiminished.

According to SEMI statistics, South Korea will overtake Taiwan for the first time last year, becoming the world’s largest equipment market. Taiwan has relinquished its position as the global leader, which it had held for five consecutive years, and has dropped to second place, while mainland China ranks third. This year, Taiwan may once again be overtaken by mainland China and fall to third place. Last year, only other regions—primarily in Southeast Asia—were exceptions; in all other regions, semiconductor equipment sales mostly grew. South Korea saw its annual growth rate more than double, making it the region with the largest increase, followed by Europe and Japan.

SEMI stated that South Korea has surpassed Taiwan, primarily due to Samsung and SK Hynix’s ongoing expansion of their NAND flash memory production capacity and upgrades to DRAM manufacturing processes. Additionally, Samsung is aggressively pursuing advanced process technologies such as 7nm for logic chip manufacturing and making substantial purchases of expensive extreme ultraviolet (EUV) equipment, demonstrating a strong ambition to secure more foundry orders.

It is worth noting that SEMI estimates that mainland China will be the region with the largest increase in global semiconductor equipment sales this year, with an estimated growth rate of nearly 50%, reaching US$11.3 billion. South Korea remains in first place, while mainland China has jumped to second, and Taiwan ranks third.

Key words: