Much of that capacity is foreign-owned, but domestic chip makers are expected to drive future Chinese expansion.
China’s share of global wafer capacity reached 16 percent in 2021, trailing only South Korea and neighboring Taiwan.
Still, reports market tracker Knometa Research, about half of China’s IC wafer capacity is controlled by overseas companies, most notably foundry giants Taiwan Semiconductor Manufacturing Co. (TSMC), United Microelectronics Corp. (UMC) of Taiwan, Samsung and memory specialist SK hynix.
Lower construction and operating costs account for most of China’s recent wafer fag gains, increasing 1 percentage point in each of the last two years. China accounted for just 9 percent of global wafer capacity in 2011, Knometa said.
Overall, global IC wafer capacity at the end of 2021 reached 21.6 million 200mm-equivalent wafers per month. Chinese fabs possessed the fab capacity to process an estimated 3.5 million wafers.
Even discounting its acquisition of Intel’s NAND flash fab in Dalian, transferred at the end of last year, Knometa noted that SK Hynix alone controls 17 percent of Chinese wafer capacity.
“China’s share of global IC wafer capacity is expected to reach nearly 19 percent by 2024,” according to the San Diego-based market tracker. “While SK Hynix, TSMC and UMC are expanding their
existing fabs in China, most of the new fabs under construction in the country are owned by domestic entities.”
The wafer capacity estimates are based on normalized installed monthly capacity, said Trevor Yancey, who previously co-founded IC Insights with Bill McClean and Brian Matas before launching Knometa Research.
Those estimates are in line with other industry projections, including an expected 10 percent annual rise in global fab equipment spending in 2022. That works out to record spending totaling more than $98 billion, according to the industry group SEMI.
It also marks the third consecutive year of record high spending on fab equipment. “The capacity buildout extends beyond the robust demand during the pandemic for electronics vital for remote work and learning, telehealth and other applications,” said Ajit Manocha, president and CEO of SEMI.
The equipment spending spree is led by foundry operators, accounting for an estimated 46 percent of IC equipment purchases, following by memory makers (37 percent). DRAM spending is forecast to decline while 3D NAND expenditures rise.
South Korean manufactures are the biggest spenders, followed by Taiwan and China. Combined, they will account for fully 73 percent of all fab equipment spending in 2022, SEMI projects.
This article was originally published on EE Times.
George Leopold has written about science and technology from Washington, D.C., since 1986. Besides EE Times, Leopold’s work has appeared in The New York Times, New Scientist, and other publications. He resides in Reston, Va.