China has become the largest buyer of chip production equipment
Hardware

China has become the largest buyer of chip production equipment – South Korea, Taiwan and the US combined spent less

Association statistics HALF says semiconductor market participants reduced spending on manufacturing equipment purchases by 11% to $25.6 billion in the third quarter compared to the same period last year. At the same time, Chinese manufacturers not only increased their purchases by 42%, but also received 43% of sales in the entire global market of technological equipment for chip production.

    Image source: ASML

Image source: ASML

Chipmakers’ equipment procurement costs fell steadily by 1% to $25.6 billion in the third quarter. Of that, $11.06 billion came from China, increasing core costs by 42% year-over-year and 46% sequentially. The purchase of equipment for chip production is usually planned many months in advance, but in the case of China, due to the reallocation of demand, a certain part of the transactions took place in the third quarter. When chipmakers in other countries didn’t need additional equipment, Chinese companies were happy to buy it. Due to the current and ever-tightening export restrictions in the USA, the Netherlands and Japan, Chinese customers only have access to devices that use reasonably sophisticated lithography standards.

    Image source: SEMI

Image source: SEMI

The largest buyer of chip production equipment after China in the third quarter was South Korea, which spent $3.85 billion on the need. That’s 19% less than a year ago and 32% less than in the second quarter of this year. Taiwan was just behind South Korea, spending $3.77 billion on equipment purchases, but that was 48% less than a year earlier. North America reduced spending minimally by 5% to $2.5 billion, Japan fell by 29% to $1.82 billion, but Europe managed to reduce spending by 2% to $1.7 billion and to increase sequentially by 5%.

Outside these six macro regions, no more than $0.89 billion was spent on purchasing equipment for chip production in the third quarter, which is 57% less than in the same period last year. However, these costs increased by 8% quarter-on-quarter, indicating that the market is able to withstand negative trends not only in China and Europe.

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Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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