The fab investment drives the global semiconductor industry into a period of rapid growth

Set micro-messenger news, the semiconductor industry began to show the volume growth after the dramatic recession from 2001 to 2009. This year, this industry is also made amazing three consecutive years of investment in wafer fab-based growth, and this Phenomena have been extremely rare since the mid-1990s.

Why is it different this time? Driven by technology drivers such as mobile applications, Internet of Things (IoT), automotive and robotics, industrial, augmented reality and virtual reality (AR & VR), artificial intelligence (AI) and 5G networks, Technology driven semiconductor revenue CAGR is expected to reach 6% from 2016 to 2021, an increase of 3.7 percentage points from 2.3% in 2011 - 2016. Global semiconductor revenue will exceed 400 billion U.S. dollars in 2017, This is unprecedented, as shown in Figure 1. The demand for chips in the market is high, the pricing of memory is high, and the market is fiercely competitive.These factors have stimulated the growth of Fab investment and many companies are investing unprecedentedly in new crystal Round factory and wafer manufacturing equipment.

Figure 1 SEMI released "global wafer market forecast report" predicted that in 2017 the total wafer manufacturing equipment spending will reach 57 billion US dollars, an increase of 41%. 2018, the estimated spending will increase by 11% to reach 63 billion US dollars. Both of these jumping expenses are contributing to the huge growth in the wafer market, which is expected to slow in 2019 after a historic large-scale investment.

As shown in Figure 2, companies such as Intel, Micron, Toshiba and GLOBALFOUNDRIES have increased their investment in Fabs in 2017 and 2018. However, as we saw in these two years Strong growth is not caused by these companies, but by a company / a major area caused by ---- South Korea's Samsung.

The first leap is South Korea, mainly Samsung's investment growth in 2017. Expected Samsung will increase its wafer equipment spending from 8 billion US dollars to 18 billion US dollars in 2017, an increase of 128%. Before that, No company in Korea invested so much money in fabs in a year, and SK Hynix also raised its wafer equipment spending by 70% to $ 5.5 billion, the largest spending in history. While most of Samsung and Hynix's spending is still in South Korea, some are also flowing to China, while part of Samsung's spending goes to the United States. Both Samsung and Hynix are expected to maintain a high level of investment by 2018.

The second leap is the investment growth in China in 2018, with China starting to build and will build more fabs in 2017. In the past, non-Chinese companies accounted for the majority in China, but since 2018, Chinese companies will be the first Compared with the domestic investment level of non-Chinese-funded enterprises, spending on Fab devices is almost as much as that of non-Chinese fabs.

From 2013 to 2017, Chinese-funded enterprises' spending on wafer equipment in China is generally between 1.5 billion U.S. dollars and 2.5 billion U.S. dollars each year, while non-Chinese companies invest between 2.5 billion U.S. dollars and 5 billion U.S. dollars each year. It is estimated that in 2018, Will invest about 5.8 billion US dollars, rather than Chinese companies will invest 6.7 billion US dollars.Changjiang Storage, Fujian Jinhua, Beverly, Hefei Changxin and many other new companies will invest heavily in the region.

Figure 2 The new wafer fab under construction

The historical highs in equipment spending in 2017 and 2018 reflect the growth in demand, and the construction spending for new fabs has also seen unprecedented growth to the highest level in history. Spending on Chinese fabs will reach $ 6 billion in 2017, Will hit another record of 6.6 billion U.S. dollars in 2018, breaking another record - no region spending more than $ 6 billion on fab construction in a year. As shown in Figure 3, more new fabs mean more to come in the future In a few years there will be a new round of wafer equipment investment.

Figure 3 To sum up, we remain optimistic about the semiconductor industry. Even if the growth slows, the industry will continue to be optimistic about the long-term growth of the industry.

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