In a sign of US export controls reshaping global supply chains, South Korea is expected to surpass China in spending on advanced chipmaking equipment next year.
None of the investors will brace for another week of volatility as Mad March ends.
According to SEMI, Korea will increase its investment in fab equipment by 41.5% to $21 billion in 2024, while China will only increase its investment by 2% to $16.6 billion in 2024, according to data from SEMI, a global semiconductor association based in the US.
China is struggling to secure vital machines to improve its chips as US curbs make it harder to access equipment purchased from a handful of makers like ASML Holding NV of the Netherlands. US chipmaking equipment suppliers, including Applied Materials Inc., Lam Research Corp. and KLA Corp., are expected to lose billions in sales this year due to US restrictions on China.
Chip foundries are particularly important in the race for economic and political dominance as they produce cutting-edge chips needed for artificial intelligence, self-driving vehicles and other technologies essential to boosting national competitiveness. For example, OpenAI's ChatGPT was produced by putting together tens of thousands of Nvidia s A 100 chips that are banned for sale in China.
South Korea is looking for its own soil to lay the ground for foundries as it sees contract chipmaking as one of its biggest growth engines for the economy, due to the large share of memory chips produced in China and growing awareness of US unease.
President Yoon Suk Yeol announced earlier this month that he plans to invest in a chipmaking cluster south of Seoul, drawing 300 trillion won $230 billion from Samsung Electronics Co. over the next two decades. In Texas, Samsung is planning to build a semiconductor plant in order to win more foundry business, particularly in the US.
Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, is expected to maintain its global lead in fab equipment spending with $24.9 billion in 2024, a 4.2% increase from this year, SEMI said in its quarterly global forecast.
In Japan, Fab equipment spending is expected to rise to $7 billion in the year 2024, SEMI said. Japan has ended its export controls to South Korea after the leaders of the two US allies held a summit in Tokyo to restore diplomatic ties and tech supply chains.
In the year 2024, global fab equipment spending is expected to increase by 21% to $92 billion, as it decreases 22% this year on weaker chip demand and higher inventories, SEMI said.
No ChatGPT Advances Are Moving So Fast Regulators Can't Keep Up With It.