China is expected to be the top spending region for fab equipment spending in 2019 and 2020, overtaking South Korea and Taiwan.
China currently has at least 20 new-build wafer fab projects, and according to industry organisation Semi, it is increasingly going to be Chinese companies and investors that will be the key drivers behind these projects.
The list includes the most recent announcement from Globalfoundries of a plan for a joint venture called Gexin to build a wafer fab in Chengdu.
Figure 1: Potential new 300mm fab projects in China. (Source: Semi)
Semi reckons that these projects will propel annual spending on fab equipment in China above $10 billion by 2018 and that it will remain at that level for many years thereafter. China is expected to be the top spending region for fab equipment spending in 2019 and 2020, overtaking South Korea and Taiwan.
Up until now inward investors such as Samsung, SK Hynix, TSMC and UMC have dominated spending for China fabs, but going forward, China companies will invest increasingly more and drive much of the spending growth through 2020. Domestic foundries such as SMIC and Hua Hong group will increase their spending, along with the China memory makers. The China-headquartered companies will dominate spending in 2019 and 2020.
There are up to 16 potential 300mm wafer fabs to be constructed or beginning to ramp.
Figure 2: China fab investment by location of investor. (Source: Semi)
On the memory side, other than the established Korean players, China companies such as YMTC (XMC) in Wuhan, Tsinghua Unigroup’s Nanjing fab, and as well as memory projects in Hefei and Fujian are all geared toward supplying NAND Flash and DRAM in China.
On the foundry side, SMIC and Hua Hong group are established and SMIC is planning a 14nm wafer fab in Shanghai and another in Shenzhen to offer 65/90nm manufacturing. Hua Hong group has just started Hua Li’s Fab 2 project aiming at 28nm process, while expanding its existing 200mm fabs. While TSMC has opted to build wholly-owned 16nm fab many other overseas foundries, including UMC, Powerchip and Globalfoundries, are working with Chinese partners.
Figure 3: China fab spending by product type. (Source: Semi)
China will become the largest market for fab equipment, materials but this aggressive spending in China does raise questions for SEMI of oversupply in the longer term.
This article first appeared on EE Times Europe.