HONG KONG By the year 2009, the China market for used semiconductor equipment will hit $800 million, as more foreign companies decide to move their legacy gear to the country, according to an analyst from Semiconductor Equipment and Materials International.
"Although there are a couple of 300mm fabs in production or planning, we believe the 200mm wafer plants will still be the mainstream consumption for the next two to three years," said Samuel Ni, SEMI's senior China analyst.
In 2009, Ni said the total Chinese fab equipment market will total $3.4 billion inching its share of the total equipment market from 6 percent this year to 7 percent. If China booms again, then the numbers could be conservative. This year, spending on chip making gear will total about $2.4 billion, almost doubling last year's total but still less than the $2.7 billion spent in 2004.
Ni believes that total spending will be reasonably flat in the next few years, which he saw as a good thing, enabling the industry to grow in a more sustainable way. "Those established fabs will spend money more prudently because they all face pressure to be profitable," he said.
China is already the top IC consumer, taking in about 25 percent of all chips produced. Parts flood into the country from all over to be assembled at low cost in its myriad factories. By 2010, Ni estimates consumption will hit $124 billion or about one-third of global consumption but the country will produce less than 10 percent of its needs.
Ni also expects the government to play a lesser role in guiding the industry during the next five years. That means it will probably be harder to get substantial government incentives for large-scale projects like fabs, although tax breaks will likely stay in place. R&D grants will also be available to fabless companies developing products in strategic industries, such as chips that support domestic standards.
"The government will still play a very important role, but it should be the market and the market players that create a truly self-sustained IC industry," he said.