The global semiconductor industry is set for a major capacity expansion, says Nikkei Asia. According to the industry association SEMI, at least 38 12-inch wafer fabrication plants will be built worldwide between 2020 and 2024 — more than half of them on the Chinese mainland and Taiwan. By 2024, global production capacity of 12-inch wafers will reach 7.2 million units a month, 30% higher than in 2019.
The industry may change profoundly with the capacity expansion, experts say. The Chinese mainland is expected to become the biggest chip producer after Taiwan and South Korea, with 12-inch wafer capacity accounting for 20% of the global total by 2024. By then, the market share of Japan will be 12% and the U.S. 10%, experts predict.
But China still faces challenges in developing advanced electronic devices, especially amid U.S. high-tech curbs. Morris Chang, founder and former chairman of TSMC, said it will take at least five years for the mainland to compete with Taiwan and South Korea in advanced chipmaking.
A U.S. semiconductor expert said it will take at least two years for China to achieve complete self-reliance in 40-nanometer semiconductor production and five years for 28-nanometer technology, as the country’s capability in lithography still lags behind.
Despite countries’ push for self-reliance, experts warned that pursuing completely independent chip supplies is unrealistic. The industry is so complicated and globalized that it can maintain innovation only through collaboration in the highly specialized world supply chain, said Goodrich of the Semiconductor Industry Association.
“Advocating a fully self-sufficient local supply chain in the semiconductor industry is a dead end,” Goodrich said.
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