China Has Overtaken South Korea As The World's Largest Market For Semiconductor Equipment

- Dec 13, 2018-

China has overtaken South Korea as the world's largest market for semiconductor equipment

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China has overtaken South Korea as the world's largest semiconductor equipment market for the first time, according to new data. South Korea shipped 3.45 billion us dollars of semiconductor equipment in the third quarter of this year, down 29 percent from the previous quarter and 31 percent from the same period last year, SEMI said Thursday. It was the first time since the first quarter of 2016 ($1.68bn) that South Korea's equipment shipments had fallen. Semiconductor equipment market is a leading indicator reflecting the semiconductor industry, some analysts believe that this shipment of semiconductor equipment reduced means that the semiconductor industry in South Korea on the red light.


After the third quarter of 2016, the volume of semiconductor equipment shipments surged in South Korea. Samsung electronics and SK hynix have been aggressively expanding production lines because of prospects for DRAM and flash memory chips. In the first quarter of 2017, shipments of semiconductor equipment in South Korea reached us $3.53 billion, overtaking Taiwan (us $3.48 billion) for the first time and becoming the world's largest market for semiconductor equipment. In the first quarter of 2018, the market size of semiconductor equipment in South Korea hit a record high, reaching 6.26 billion us dollars. Since then, the market size of semiconductor equipment in South Korea has declined to only 4.86 billion us dollars in the second quarter.


Semiconductor industry insiders said that the chip market in the first half of this year is in good shape, but in the second half of this year, the demand decreases, the market downturn, coupled with samsung electronics, SK hynix adjust investment plans, the overall equipment market size has been reduced.


China's semiconductor equipment market continues to expand. In the third quarter, China's semiconductor equipment market was usd 3.98 billion, up 5% month-on-month and 106% year-on-year, making it the world's largest semiconductor equipment market. In the third quarter of 2017, the market size of China's semiconductor equipment was only $1.93 billion, which was only two-fifths of the market size of South Korea at that time. In just one year, China surpassed the market size of South Korea by a factor of two.


China's semiconductor market has developed rapidly in recent years, and more and more companies have expressed interest in entering the chip field. Take memory chips as an example. Before, China's domestic memory chips were completely imported. This year, the memory production line of fujian jinhua integrated circuit is expected to be put into production. Gree, kangjia and other traditional home appliance enterprises also said that will enter the chip field.


According to a report by the international semiconductor equipment and materials association, China is currently building 25 FAB construction projects in 16 regions including Beijing, tianjin, xi 'an and Shanghai. Enterprises such as fujian jinhua integrated circuit and Yangtze river storage technology co., ltd. are not as good as those in South Korea in terms of technology level, but they have put into mass production of chips. The report predicts that the market size of semiconductor equipment in China is expected to reach 11.8 billion us dollars this year, an increase of 43.9% year on year. Next year, the market size is expected to expand to 17.3 billion us dollars, an increase of 46.6%, making China the world's largest market. In the same period, the size of South Korea's semiconductor equipment market decreased from $17.96 billion to $16.3 billion, a decrease of 9.2 percent.