Industry insiders: China's chip investment drives prices of used semiconductor equipment to continue to rise sharply

Prices of used chipmaking equipment have surged over the past two years on strong demand, especially in mainland China, which is expected to account for a fifth of global chip production capacity this year.

According to the Nikkei Asian Review, industry insiders revealed that the price of second-hand lithography machines used to etch circuits onto silicon wafers has doubled. Shuji Kumazawa, senior vice president of SurplusGLOBAL Japan, a second-hand chip manufacturing equipment supplier, said, "This is an unprecedented boom in second-hand semiconductor production equipment. Once the goods are on the market, buyers will appear."

As the chip shortage continues, chipmakers are expanding existing production lines and building new ones. Suppliers of chip manufacturing equipment are unable to meet such high demand. A representative of a leasing company pointed out that "the delivery time of new products has been extended from one year to about one and a half years."

"To be honest, we prefer new equipment, but to cope with the sudden surge in customer production, we chose used equipment because they can be purchased quickly," said a representative of a chipmaker.

The price of used equipment varies according to its condition and age. "Some equipment has even quadrupled in price," said a sales representative from leasing company Mitsubishi HC Capital.

The report noted that the shortage of traditional equipment for 200mm wafers is particularly evident. While smartphones and similar devices typically use chips from 300mm wafers, 200mm wafers are still used to make chips for cars and appliances. 200mm wafer equipment has been a mainstream product since the 1990s, so many wafer equipment sold on the second-hand market are more than 20 years old. "Even so, in some cases, their prices are the same as when they were first launched," said a source.

Mainland China has invested heavily in traditional chip production lines. According to data from the Semiconductor Industry and Equipment International (SEMI), global investment in 200mm wafer fab equipment is expected to reach US$5 billion in 2021-2022 after exceeding US$3 billion in 2020. Mainland China is expected to account for 21% of global production capacity this year, becoming the leading region.