China to house over 40% of semi fabs by 2020

China’s ambition to build a significant domestic industry is beginning to take shape as more than 40% of front-end semiconductor fabs slated to begin operation in 2017 to 2020 are located in China.

According to SEMI, a trade group that represents semiconductor equipment and materials suppliers, of 62 front-end fabs that will open worldwide over the next three years, 26 are in China, representing 42% of the global total.

Of the 62 fabs currently on the drawing board or in construction, most are volume manufacturing fabs, with seven slated to be R&D or pilot fabs, said Christian Dieseldorff, director of semiconductor industry research at SEMI.

Six Chinese fabs are expected to come on line next year, followed by a peak of 13 in 2018. Most of the fabs coming on line in China in 2018 are foundries, SEMI said.

The chip fab building activity in China dwarfs that of anywhere else in the world. Regionally, North America has the next highest number of fabs commencing production between 2017 and 2020, 10. Taiwan has nine fabs in the works while Europe, South Korea and Japan have 17 combined.

Of the 62 fabs being built, 32% are foundries. Memory chip fabs make up the second largest group (21%) while LED (11%), power chip (10%) and MEMS fabs (8%) round out the group.

This fab-building boom will make China the key market for semiconductor equipment over the next several years. SEMI estimates that China accounted for roughly $6.7 billion worth of the $39.7 billion chip equipment market in 2016. In 2017, SEMI estimates that China will account for $7 billion out of the projected $43.4 billion global market size.

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