Chinese chipmakers to cut equipment spending this year

According to experts from Canadian TechInsights, who regularly take part in “exposing” the progress of Huawei suppliers in the field of lithography, this year the volume of expenses of Chinese companies on the purchase of equipment for the production of chips will decrease for the first time since 2021, albeit by only 6%. More importantly, the share of Chinese clients in the market for equipment of this type will drop to 20% compared to 40% last year.

Image Source: ASML

Over the past two years, China has managed to remain the world’s largest buyer of semiconductor manufacturing equipment. Last year, Chinese companies spent $41 billion on these purposes, but this year the corresponding amount may decrease by 6% to $38 billion. It is quite obvious that this will happen due to the introduction of additional restrictions on equipment exports by the United States and its allies. Nevertheless, TechInsights representatives insist that the tendency to oversaturation of the market will also contribute to the reduction in costs for Chinese chipmakers.

As noted recently, in the mature lithography market, which is little affected by US sanctions, Chinese manufacturers have achieved such a scale of expansion that they have already begun to threaten Taiwanese veterans in the segment. Even the leader of the Chinese contract chip manufacturing services market, SMIC, admitted this week that it sees risks associated with market saturation in the mature lithography sector. Chinese equipment manufacturer Naura Technology, amid high growth rates, has managed to become the seventh-largest equipment supplier in the world in its category.

According to TechInsights, although the Chinese industry is working on import substitution of equipment in the field of semiconductor component production, its main weak points remain lithography systems, as well as chip testing and packaging equipment. As the layout of semiconductor solutions becomes more complex, these areas are becoming especially important, given the restrictions on access to advanced lithography. In the chip testing equipment segment, Chinese suppliers in the domestic market met only 17% of the demand in the year before last, and in the chip packaging equipment sector – no more than 10%.

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