Taiwan and mainland China stage "The Twins"
Latest update time：2020-04-02
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At present, the focus of global semiconductor manufacturing has fallen on East Asia, specifically, the four major regions of Taiwan, China, China, Japan and South Korea, especially wafer foundry and packaging and testing, as well as the closely related upstream semiconductor materials and equipment in the industrial chain. Most of the global related consumption and transactions are completed here. Among these four major regions, Taiwan and China are the top priorities, because the consumption, scale and proportion of wafer foundry, packaging and testing, semiconductor materials and equipment of these two "twin stars" are almost in the top two in the world, which fully reflects the comprehensive strength and vitality of semiconductor manufacturing in Taiwan and China.
Material
Yesterday, SEMI released the latest semiconductor materials market report (Materials Market Data Subscription, MMDS), and the global semiconductor materials market revenue fell slightly by 1.1% in 2019. However, Taiwan, China has been the world's largest semiconductor materials consumption region for 10 consecutive years.
Data shows that global wafer manufacturing materials fell from US$33 billion to US$32.8 billion, a slight decrease of 0.4%. The sales of wafer manufacturing materials, process chemicals, sputtering targets and CMP fell by 2% compared with 2018. Last year, packaging materials revenue fell by 2.3%, from US$19.7 billion to US$19.2 billion. Last year, only the two categories of substrates and other packaging materials achieved revenue growth.
As a major wafer foundry and advanced packaging center, Taiwan's total semiconductor material consumption reached US$11.3 billion, a slight decline from US$11.6 billion in 2018. South Korea still ranked second, with semiconductor material consumption of US$8.83 billion last year, also slightly lower than US$8.94 billion in 2018.
Mainland China ranked third, with semiconductor material consumption of US$8.69 billion last year. It was also the only market with positive year-on-year growth in semiconductor material consumption last year, up 1.9% from US$8.52 billion in 2018. Material revenues in other regions were flat or fell by single digits.
It can be seen that in the global semiconductor material consumption market, Taiwan ranks first in stock, while the mainland ranks first in growth.
equipment
In December last year, SEMI pointed out that global semiconductor manufacturing equipment sales will fall from the historical peak of US$64.4 billion in 2018 to US$57.6 billion in 2019, but will recover in 2020 and set a new high in 2021.
SEMI believes that equipment sales will increase by 5.5% to $60.8 billion in 2020 and reach a new high of $66.8 billion in 2021 as leading equipment manufacturers invest in 7nm, 5nm and more advanced process equipment, especially for foundry (represented by TSMC) and logic.
According to SEMI statistics, sales of wafer fab equipment, including wafer processing equipment and mask equipment, fell 9% to $49.9 billion in 2019. The packaging equipment sector is expected to fall 26.1% to $2.9 billion in 2019, while semiconductor test equipment is expected to fall 14.0% to $4.8 billion.
Taiwan will replace South Korea as the largest equipment market and lead the world with an annual growth rate of 53.3%, followed by North America with a growth of 33.6%. Mainland China will maintain the second position for the second consecutive year, while South Korea will fall to third after cutting capital expenditures.
SEMI said that advanced logic and foundry, new projects in China, and memory will drive the recovery of the equipment market in 2020. Taiwan is expected to remain the largest equipment market in 2020 with sales of $15.4 billion, China second at $14.9 billion, and South Korea third at $10.3 billion.
All tracked sectors are expected to grow in 2021, with the recovery in memory spending in full swing. China is expected to rise to the top with more than $16 billion in equipment sales, followed by South Korea and Taiwan.
The above data was given by SEMI in December last year, but the sudden outbreak of the epidemic in January this year disrupted the development rhythm of the global semiconductor industry, and the equipment industry was naturally unavoidable. The outbreak of the epidemic affected China's 2020 wafer fab equipment spending, so SEMI updated and revised the forecast report downward. Despite the impact of the epidemic, China's equipment spending this year will still increase by about 5% compared with the same period last year, exceeding US$12 billion. The investment momentum in the Chinese market mainly comes from Samsung's Xi'an plant, SK Hynix's Wuxi plant, SMIC and Yangtze Memory.
At present, the epidemic control in East Asia, including Taiwan, China, China, Japan, and South Korea, is the best in the world, and the recovery of semiconductor production is relatively optimistic, which guarantees the consumption of equipment. In addition, global semiconductor equipment manufacturers are mainly concentrated in the United States and Japan. The epidemic in the United States is serious, and the equipment supply has been greatly affected for a certain period of time, but the epidemic control in Japan is relatively good, and the equipment supply is guaranteed. In this way, whether on the demand side or the supply side, the four major regions in East Asia are likely to have increased in scale and vitality compared with other regions in the event of natural disasters. This adds weight to the semiconductor equipment consumption capacity of Taiwan and China, and the top two positions are more stable.
Wafer Foundry
In mid-March, TrendForce released the rankings, revenue, and year-on-year growth of the top ten global foundry companies in the first quarter of 2020, as shown in the figure below.
As can be seen from the figure, the top four manufacturers in terms of year-on-year revenue growth are all from Taiwan and mainland China.
The top spot is naturally TSMC, with revenue increasing by 43.7% year-on-year. The company's 7nm node orders are stable. Affected by the epidemic, even if some wafer production adjustments occur, subsequent order demand can fill the gap, and capacity utilization remains full; the overall capacity utilization of 12nm/16nm nodes can be maintained at 90%; mature and special processes are also steadily contributing to revenue.
Powerchip, which ranked second, saw its revenue increase by 41.2% year-on-year, mainly due to the increase in demand for CIS and DDIC and the replenishment of customer inventory.
UMC ranked third with a year-on-year revenue growth of 32.2%. The company's 22nm/28nm product line has received new orders. In addition, the new customers and product portfolio brought by its new plant in Japan will also increase capacity utilization quarter by quarter.
SMIC ranked fourth with a year-on-year revenue growth of 26.8%. Benefiting from the domestic demand in China for CIS, PMIC, fingerprint recognition and embedded memory applications, the production capacity utilization rate is close to full load and the revenue is gratifying.
Of course, the above is just TrendForce's estimate of the first quarter revenue of major global foundries. The actual data will depend on the company's financial reports. However, these forecasts can basically reflect the industry situation and pattern. In addition, the first quarter revenue mainly comes from last year's orders, and the epidemic will have a significant impact on the second quarter revenue. I'm afraid everyone will have a hard time.
However, as mentioned earlier, the four regions in East Asia have been the least affected by the epidemic globally, which in turn has increased the scale and market share of the wafer foundry industry in Taiwan and mainland China.
Closed Beta
According to ChipInsights's estimate in December 2019, among the top ten global packaging and testing companies in 2019, divided by headquarters location, five of the top ten packaging and testing companies are from Taiwan (ASE, SPIL, Powertech Technology, King Yuan Electronics, Chipbond), with a market share of 43.9%, an increase of 2.1 percentage points from 41.8% in 2018. There are three companies in mainland China (JCET, Tongfu Microelectronics, Huatian Technology), with a market share of 20.1%, a decrease of 0.1 percentage points from 20.2% in 2018. In addition, there is one company in the United States (Amkor), with a market share of 14.6%, and one company in Singapore (UTAC), with a market share of 2.6%.
It can be seen that in the global packaging and testing market, the advantages of Taiwan and mainland China are more obvious, and they almost monopolize the global packaging and testing industry.
IC Sales
In mid-March, IC Insights released a research report that mainly analyzed the revenue market share and year-on-year growth of chip components in the world's six major regions. The companies in each region included both IDM and Fabless.
As can be seen from the figure, global chip component sales in 2019 decreased by 15% year-on-year. There are two main reasons: the global semiconductor industry entered a downturn that has not been seen in many years in 2019, and the United States imposed export restrictions on Huawei.
Among the six major regions, only Mainland China has increased by 10% year-on-year, while other regions have shown negative growth to varying degrees. This also fully reflects the strong vitality and huge development space of the chip component market in Mainland China.
Among all the regions with negative growth, Taiwan's decline was only one percentage point more than Europe. In this list, Taiwan and the mainland occupy the top three, once again confirming the market influence and vitality of the "twin stars".
Conclusion
In summary, from the five dimensions closely related to semiconductor manufacturing, it can be seen that in terms of global semiconductor manufacturing business, Taiwan and mainland China rank among the top in terms of stock and incremental levels, most of them are in the top two, at least in the top three, and the overall level is ranked first.
*Disclaimer: This article is originally written by the author. The content of the article is the author's personal opinion. Semiconductor Industry Observer reprints it only to convey a different point of view. It does not mean that Semiconductor Industry Observer agrees or supports this point of view. If you have any objections, please contact Semiconductor Industry Observer.
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