By J. Robert Lineback, Senior Technical Editor
Mainland China’s appetite for new semiconductor equipment appears to be growing a little faster than previously expected, based on data presented at this month’s SEMICON China trade show in Shanghai. In 2004, new chip equipment revenues in China jumped 132% to $2.68 billion from $1.16 billion in 2003, said SEMI, which hosted the event on March 15-17.
The latest data puts China’s new chip equipment market slightly ahead of a $2.64 billion estimate in SEMI’s industry consensus forecast released in December 2004, and more than $800 million higher than the association’s $1.85 billion projection at SEMICON China last year.
Industry observers and local chip executives indicate that China’s semiconductor tool market is gaining momentum partly due to the lack of used equipment and the closing of the technology gap with other IC manufacturing regions.
Wafer fab equipment sales, excluding used and refurbished systems, grew 116% to $2.06 billion in 2004 compared with $953 million in 2003. Growth in final assembly equipment was even stronger, with sales more than tripling to $622 million, said Stanley Myers, president and CEO of SEMI, during a briefing prior to the start of SEMICON China.
In total, mainland China’s new chip equipment market is expected to account for about 10.6% of the world’s total sales by 2007 compared with 5.2% in 2003, based on the SEMI consensus forecast released in December.
In the semiconductor materials market, China accounted for about 4% of the world’s $28.07 billion in 2004. The mainland’s materials purchases grew the fastest of all other regional markets, increasing 23% last year to $1.01 billion from $820 million in 2003, based on new data released by SEMI in Shanghai.
China’s own domestic market for electronics products is a key driver of IC consumption, said Marco Mora, COO at silicon foundry supplier Semiconductor Manufacturing International Corp. (SMIC) in Shanghai.
“China today is the world’s third largest IC market in the world but domestic production still lags far behind,” said Mora in a chip market forum at SEMICON China. He estimated that China represented 20% of ICs consumed worldwide, but chip manufacturing in China was only 3% of global capacity in 2004.
Another significant driver of new chip manufacturing in China has been the explosive growth of domestic system design companies, according to Mora, in his briefing at SEMICON China. “There is a need in China to link with [domestic] manufacturing of ICs,” he said, adding that domestic IC design revenues will double to $1.0 billion in 2005 from $500 million in 2003.
“By 2009, it is projected to be around $6 billion,” said SMIC’s COO. “As of today, there are 10 8-in. fabs in China, and one 12-in. [SMIC’s 300mm plant in Beijing]. In terms of capacity, there are now around 11 fabs, which have the capability of producing chips below 0.35-micron technology.” Mora indicated that SMIC – China’s first publicly held silicon foundry – is now preparing 90nm capacity for both 200mm and 300mm wafers in 2H05. – J.R.L.