China to spend world’s biggest amount on semiconductors this year even as it cuts equipment purchases

A new forecast from industry association SEMI says Chinese companies’ spending on chip-making equipment will fall 24 percent to $38 billion this year from a year earlier, but the country will still outspend other chip-making regions.

Image source: Micron Technology

In particular, Taiwan will spend only $21 billion on purchasing equipment for chip production, South Korea will be ahead of it by only $500 million, but both regions will still be far behind China with its $38 billion. Both Americas, with a predictable overwhelming advantage in favor of the North, will spend no more than $14 billion on purchasing equipment, as will Japan. Europe will be limited to $9 billion, so no one will be able to compete with China in this area.

Incidentally, last year Chinese companies spent $50 billion on chip production equipment, and the expected drop in spending to $38 billion this year may be largely due to supplier sanctions rather than a cooling in demand as such. Global spending on chip production equipment this year will grow by 2% to $110 billion, a positive trend that will be observed for the sixth year in a row.