Chip manufacturing overcapacity on the rise in China

April 15, 2019 //By Peter Clarke
Chip manufacturing overcapacity on the rise in China
China's rush to compete in semiconductor manufacturing and reduce its balance of trade deficit in chips is likely to lead to excess manufacturing capacity for the next several months, according to a Digitimes report.

The report references unnamed industry sources who comment that while China has been a major buyer of semiconductor manufacturing equipment in recent quarters much of that equipment is idle and wafer fabs that are ready for operation have yet to fulfil employment quotas.

SEMI is monitoring fab construction in China and counts seventeen 300mm wafer fabs projects being brought up aimed at foundry, DRAM and 3D-NAND production. There are also many 200mm wafer fabs.

China became the second largest region for spending on chipmaking equipment in 2018 when total sales reached $60.5 billion and despite a slowdown in 2019 China is expected to retain that position (see Chip manufacturing equipment market goes into reverse ).

Companies with 300mm wafer fabs under construction include: Semiconductor Manufacturing International (SMIC), Hua Hong Semiconductor (Wuxi), Tsinghua Unigroup (Nanjin, Chengdu), Chongqing Alpha and Omega Semiconductor, Guangzhou CanSemi Technology and SiEn (Qingdao) Integrated Circuits.

It is also notable that Globalfoundries had plans for a 300mm wafer fab through a joint venture with the Chengdu Municipality. It is thought that building shell of Gexin (Chengdu) Integrated Circuit Manufacturing Co. Ltd. has been built and some equipment installed but it is not clear when any production will start there.

News articles:

IC Insights, SEMI far apart on significance of Chinese IC production

China set to make a fifth of world's chips in 2020

Chip manufacturing equipment market goes into reverse


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