South Korea could exceed China in expenditure on sophisticated chipmaking equipment next year in an indication of US export limits changing global supply networks for semiconductors.
South Korea is predicted to surpass China in expenditure on sophisticated chipmaking equipment next year in an indication of US export limits changing global supply networks for semiconductors.
Korea will likely boost its investment in fab equipment by 41.5% to $21 billion in 2024 while China posts just a 2% rise to $16.6 billion, according to statistics from SEMI, a worldwide semiconductor group located in the US.
The change illustrates China’s effort to get essential machinery to develop its chips as US limitations make it difficult to access equipment bought from a few companies like ASML Holding NV of the Netherlands. As the Dutch and Japanese governments join limitations imposed by the US on exports to China, the most modern chips and equipment from the likes of Nvidia Corp. and Tokyo Electron Ltd. are being kept out of Chinese hands.
American chipmaking equipment vendors such as Applied Materials Inc., Lam Research Corp., and KLA Corp. are anticipated to lose billions in sales this year owing to the US sanctions on China.
Chip foundries are especially vital in the struggle for economic and political domination since they generate cutting-edge chips required for artificial intelligence, self-driving cars, and other technologies critical to enhancing national competitiveness. OpenAI’s ChatGPT, for instance, was developed by connecting tens of thousands of Nvidia’s A100 processors — which are forbidden for sale in China — into a working supercomputer.
With a substantial percentage of its memory chips made in China and rising knowledge of US uneasiness, South Korea is now turning to its territory to set the basis for foundries as it counts contract chipmaking among its largest growth engines for the economy.
President Yoon Suk Yeol earlier this month unveiled a proposal to invest in a chipmaking cluster south of Seoul attracting 300 trillion won ($230 billion) from Samsung Electronics Co. over the next two decades. Samsung is also establishing a semiconductor factory in Texas to capture additional foundry business, notably in the US.
Taiwan, home to the world’s biggest contract chipmaker, Taiwan Semiconductor Manufacturing Co., is likely to keep its worldwide lead in fab equipment investment with $24.9 billion in 2024, a 4.2% rise from this year, SEMI said separately in its quarterly global forecast.
Fab equipment investment in Japan is anticipated climb to $7 billion in 2024, SEMI stated. Japan recently eased its export limitations to South Korea after the presidents of the two US allies attended a meeting in Tokyo to reestablish diplomatic relations and tech supply chains.
Overall, worldwide fab equipment investment is likely to grow 21% to $92 billion in 2024 after it lowers 22% this year on slower chip demand and heavier stockpiles, SEMI said.
