China's expenditure for semiconductor equipment is expected to grow by a double-digit rate in 2020 as the willingness for expanding capacity by its makers in the IC manufacturing industry is expected to rise in light with a rebound in demand for end-market devices and the roll-outs of new 5G applications.
Expenditure for semiconductor equipment in China is estimated to have reached US$12.9 billion in 2019 and will expand to US$14.9 billion in 2020, accounting nearly 25% of global expenditure in the sector and enabling China to maintain its status being the world's second largest semiconductor equipment market in the year, SEMI estimates.
For the period from 2016-2020, the expenditure for semiconductor equipment in China is to grow by a CAGR of 23%, significantly higher than the industry's average, SEMI data shows.
In addition to demand for capacity ramps by IC manufacturing and backend service companies, growing support from China's National Integrated Circuit Industry Investment Fund (Big Fund) and tax incentives for imports of semiconductor equipment will also be the impetus for pushing spending on semiconductor equipment in 2020, Digitimes Research believes.
China's ongoing de-Americanization campaign to cut reliance on the US supplies of crucial semiconductor components and technologies, might benefit non-US and local suppliers of semiconductor equipment, but it depends on whether the homegrown semiconductor equipment suppliers in China have sufficient competitiveness.