The worldwide semiconductor equipment market, which had a scale of US$60.5 billion in 2018, is controlled mostly by companies in the West. The development of China's semiconductor industry has been constantly threatened by possible US government bans on makers providing most advanced equipment to China's firms.
In addition to local players that have been aggressively investing in China's semiconductor industry, multinational enterprises have also been doing the same. Of the worldwide semiconductor equipment market's scale of US$60.5 billion in 2018, China contributed US$12.2 billion or 20.2%. However, according to information from the upstream supply chain Digitimes has obtained, only less than 40% of the amount was from China-based firms. The rest was from demand from multinational enterprises such as Samsung, SK Hynix, Intel and TSMC, for their capacity expansions in China.
Many market watchers originally expected the proportion of China-based semiconductor players' equipment purchases to rise on year in 2019, but have recently revised their views, estimating the percentage to slip in 2019. Meanwhile, semiconductor players in Taiwan who had been conservative about investing locally in the past few years, are expected to become more aggressive in planning their local capacity expansions in response to the US-China trade tensions.
While SEMI has forecast that the worldwide semiconductor equipment market will decline in 2019, demand for semiconductor equipment from Taiwan is expected to rise back to US$11.4 billion in 2019, coming close to that from South Korea and China. In 2018, China had the second largest semiconductor equipment market, behind only South Korea. But China's demand for semiconductor equipment is estimated to slip from 2018's US$12.2 billion to US$11.96 billion in 2019 because of the US trade policies against China.
(Note: This is part of a series of articles by Digitimes president Colley Hwang on the latest developments of the IT industry in the wake of the US-China trade war.)