Global semiconductor manufacturing equipment sales increased by 19 percent in 2020

0
1306
Semiconductor industry growth in 2020 report.

SEMI, an electronic components advocacy group, reported global semiconductor manufacturing equipment sales rose by 19 percent year-over-year in 2020.

The group’s data indicates chipmakers spent $71.2 billion purchasing wafer fabrication, assembly and packing, and testing tools last year.

The organization also found East Asia led the pack in terms of capital expenditure by geographic region.

Why Semiconductor Equipment Spending Jumped in 2020

According to SEMI, spending on chip-making equipment reached a new all-time high last year. That result makes given the impact the coronavirus pandemic and certain geopolitical tensions have had on the semiconductor industry.

First, the outbreak of COVID-19 kicked off a global digitalization boom that indirectly generated robust interest in part fabrication machinery. Organizations, businesses, and individuals purchased new electronic devices to operate amid widespread lockdown mandates. Consequently, OEMs in multiple industries significantly ramped up their semiconductor stockpiles to accommodate the sharp upswing in demand.

The worldwide embrace of digital technology helped the field reverse the 2019 contract trend to expand by 7.3 percent annually.

Eventually, consumer and commercial interest in electronic components created a supply-demand imbalance that evolved into a major semiconductor shortage. As the crisis emerged, chipmakers worldwide moved to expand their production capacity by building out their fabrication resources or establishing new foundries. That development led to a spike in IC manufacturing equipment purchases that heavily contributed to last year’s production tool sales.

In addition, the United States and China have been engaged in a trade war for several years. The conflict has made moving electronic parts between the two nations progressively more expensive and challenging. As a result, several regions have made plans to establish domestic semiconductor ecosystems, including subsidizing the construction and equipping new chip factories.

Taken together, the digitalization and component independence trends created record demand for electronic component manufacturing machines in 2020.

East Asia Tops Semiconductor Equipment Spending Charts

SEMI’s research indicates the East Asia region spent more money acquiring semiconductor equipment than the rest of the world combined last year. Together, China, Taiwan, and South Korea accounted for 72.86 percent of the sector’s revenue, which translates to $51.95 billion.

China took the top position, investing $18.72 billion in IC manufacturing tools in 2020, up 39 percent year-over-year.

The country’s massive financial outlays make sense as it currently imports more than $300 million worth of ICs every year. Its leaders have been keen to lower its dependence on foreign providers by cultivating a thriving chip sector. However, the superpower’s efforts have been stymied by U.S. sanctions against its local technology champions, like Huawei and SMIC.

The Chinese government recently declared it would waive import taxes on component fabrication equipment and materials through 2030. That indicates the country’s interest in improving its domestic IC segment has only intensified.

Taiwan came in second place with $17.15 billion in fabrication machinery spending last year, up 0.2 percent yearly. TSMC, the world’s largest pure-play foundry, headquartered in Taipei, explains much of its national outlays. The corporation recently announced it would invest $30 billion in enhancing its production capacity this year, so the area should remain a top semiconductor tool buyer in 2021.

South Korea considerably increased its regional chip production equipment purchases, paying $16.08 billion compared to $9.97 billion in 2019.

Samsung, based in Seoul, probably played a significant role in driving that growth. The firm is in the process of spending $116 billion to become the planet’s top IC vendor. Besides, the country’s government committed to pouring over $1 billion into its domestic chip ecosystem through 2030. After the shortage began, South Korea said it would pour $176 billion into bolstering its automotive electronic component industry.

Because of its sizable recent investments, East Asia could be the biggest semiconductor equipment purchaser by region in 2021.

LEAVE A REPLY

Please enter your comment!
Please enter your name here