Tuesday, September 3rd 2024
China Bought More Chipmaking Tools in the First Half of 2024 Than US, Taiwan, and South Korea Combined
According to a recent report from Nikkei, China has claimed the number one spot as the single highest spender on chipmaking tools. As the data from SEMI highlights, China spent a whopping $25 billion on key semiconductor tools in the first half of 2024, more than the US, Taiwan, and South Korea combined. And the train of acceleration for the Chinese semiconductor industry doesn't seem to be slowing down, as the country is expected to spend more than $50 billion for the entire year 2024. However, this equipment is not precisely leading-edge, as Chinese companies are under Western sanctions and are unable to source advanced EUV lithography tools for making sub-7 nm chips.
Most of the spending is allocated to mature node chipmaking facilities. These so-called "second tier" companies are driving the massive expenditures, and they are plentiful. Nikkei reports that there are at least ten firms that operate with mature nodes like 10/12/16 nm nodes. Being the biggest spender, China is also one of the primary revenue sources for many companies. For the US chipmaking tool companies like Applied Materials, Lam Research, and KLA, Chinese purchases accounted for 32%, 39%, and 44% of their latest quarterly revenue, respectively. Tokyo Electron recorded orders to China accounting for 49.9% of its revenues in June, while the Netherlands giant ASML also attributed 49%. Perhaps even more interesting is the expected outlook for 2025, which shows no signs of slowing down. The Chinese semiconductor industry must establish complete self-sufficiency, and massive capital expenditures are expected to continue.
Source:
Nikkei
Most of the spending is allocated to mature node chipmaking facilities. These so-called "second tier" companies are driving the massive expenditures, and they are plentiful. Nikkei reports that there are at least ten firms that operate with mature nodes like 10/12/16 nm nodes. Being the biggest spender, China is also one of the primary revenue sources for many companies. For the US chipmaking tool companies like Applied Materials, Lam Research, and KLA, Chinese purchases accounted for 32%, 39%, and 44% of their latest quarterly revenue, respectively. Tokyo Electron recorded orders to China accounting for 49.9% of its revenues in June, while the Netherlands giant ASML also attributed 49%. Perhaps even more interesting is the expected outlook for 2025, which shows no signs of slowing down. The Chinese semiconductor industry must establish complete self-sufficiency, and massive capital expenditures are expected to continue.
15 Comments on China Bought More Chipmaking Tools in the First Half of 2024 Than US, Taiwan, and South Korea Combined
China is the first producer of electronics worldwide : these sales figures are understandable.
While China is threating with severe sanctions Japan if they stop doing this.
Those political games are getting out of hand.
fortune.com/asia/2024/09/02/china-promises-retaliation-japan-chip-export-controls-toyota-semiconductors/
www.reuters.com/markets/asia/china-warns-japan-retaliation-over-potential-new-chip-curbs-bloomberg-reports-2024-09-02/
it's sad it's happening because of political reasons but it wouldn't have other wise.
If the PRC is importing these machines while planning for 'self-sufficiency' what do these short-sighted companies expect will happen to their tools and machines? They will be reverse engineered and iterated upon with billions of subsidies which will rapidly outpace their own improvements.
Edit: Also from each company's perspective they probably think if they don't sell to the Chinese then their competition will anyway and they will lose sales and accomplish nothing for the future.
If i recall correctly. There was a news post on TPU where a Chinese CPU was announced but the technology itself was about 10-20 years behind the US. Im sure China will find a way to get the information they need to replicate better technology. They somehow always do.
The real thing is just that China's gov money is flooding markets. It happened with solar, it happens with cars, and it happens with chips too, wherever they can. They would do that regardless of the movements of Intel or AMD, those are just used as a canvas to paint their own story, probably based on their technology too. Its never a good thing - we owe the dominance of Big Tech in part because of gov funding as well. And that dominance is really effectively a proxy form of gov dominance with severely lacking checks and balances. Its dangerous AF and it has already spiralled out of control if you ask me.
I'm kinda convinced it doesn't really matter how dominant or not domestic companies are in the face of a China that puts its mind to something. Stalling them is the best we can do short of building a great firewall around them which nobody wants or can possibly do.
Chinese EV companies do have an unfair advantage with state subsidies that needs to be balanced but there's also a massive boatload of greed and stupidity that's pervaded the car industry. If another player comes in and shakes things up that would be fantastic IMO, assuming it's done in a fair manner of course.
And that on its own puts the entire idea that the end goal is fair competition, under a lot of pressure.
The market isn't fair. We're just protecting our interests, screw everyone else. And so does China. Its history in a nutshell, and sure, since WTO and lots of treaties things might have looked differently, but the same competitive rules exist: you either win, or you lose, a fair balance is at best temporary.
And it is that exact sentiment that has caused lots of Western companies to get lazy and complacent. Too big to fail comes to mind. Eventually, everything corrupts because people wiggle themselves into comfortable positions. Again: Tesla. What's Elon doing lately... It ain't all about bringing us to Mars anymore...