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China’s IC foundries sitting idle

by on12 April 2019

And more capacity is expected to make matters worse

The Chinese IC foundry is suffering from a bad case of idle capacity, and things are expected to get worse when more 12- and 8-inch fabs are set to come online.

Digitimes reports how equipment and facilities installed at many of China's new fabs have been kept unwrapped. The fabs are ready for operations, but have yet to fully fill their workforces, the sources indicated.

The problem is that there are clear product positioning and customer orders. The implication is that while production might be something the Chinese can do very well, getting orders and marketing is putting a drag on a need for the product. In other words – you can buy all the gear, but it does not mean anything if you can't flog the product.

China became the world's second-largest market for semiconductor manufacturing equipment in 2018, when total sales climbed to the record-high US $64.5 billion, according to SEMI data.

Equipment sales in China surged 59 per cent on year to US$13.11 billion in 2018, outperforming other regions in terms of growth.

China’s government has been stepping up efforts to boost the country's semiconductor self-sufficiency. Several new 6-, 8- and 12-inch fabs have been established in China since 2017, boosting Chinese clients' importance in the global fab tool market.

Companies including Semiconductor Manufacturing International (SMIC), Hua Hong Semiconductor (Wuxi), Tsinghua Unigroup (Nanjing, Chengdu), Chongqing Alpha and Omega Semiconductor, Guangzhou CanSemi Technology and SiEn (Qingdao) Integrated Circuits all have 12-inch wafer fabs under construction, the observers said.


Last modified on 12 April 2019
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