The ongoing and escalating trade tensions between the US and China, and China's push for IC self-sufficiency, have made Taiwan-based semiconductor equipment makers among the largest beneficiaries, according to industry sources.
Taiwanese companies are expected to receive more generous subsidies and assistance for expanding capacity in China and building factories, sources said.
In the past six months, Taiwan-based companies have seen demand for equipment and materials from Chinese companies soar, a result of China's push for a more independent semiconductor supply chain. Urgent orders have come for whatever volume that is available - at whatever price, according to sources.
Since equipment, components, and materials from Taiwan-based companies are mostly not included in the US ban, many manufacturers are accelerating production to supply to Chinese customers.
If the CNY1 trillion support package for the semiconductor industry in China goes through in first-quarter 2023, Taiwan's supply chain will see even more significant revenue contributions.
There is also the ongoing debate about the supply chain leaving Taiwan, particularly TSMC setting up factories overseas and the military tension causing companies to leave Taiwan. However, semiconductor companies mostly perceive the former as an act of risk diversification, while the latter has not actually happened.
On the other hand, companies are in fact leaving China. The electronics industry has accelerated its relocation. Dell and Hewlett-Packard (HP) are reportedly demanding IC design and manufacturing not to be done by Chinese companies. Additionally, if the long-rumored clamp down on Yangtze Memory Technologies (YMTC) happens, Apple will stop placing orders with the company.
Novatech, which specializes in chemical and gas equipment, has already been a major beneficiary of China's semiconductor subsidies, mainly because mature processes and compound semiconductors in China have yet to be limited. As a result, major production expansions are being launched in China in these two fields, which has boosted Novatech's orders from major customers such as Semiconductor Manufacturing International (SMIC).
Sources pointed out that 42% of leading semiconductor testing company Materials Analysis Technology's (MA-tek) revenue comes from the Chinese market. MA-tek previously stated that the ongoing US-China trade war and US export controls had significantly increased failure analysis orders from Chinese customers.
Taiwan's testing and analysis labs are superior to those in China both in technical level and scale. As such, MA-tek has been operating in China for years. The company said its new labs in Shanghai, Xiamen, and Shenzhen have all seen a significant influx of orders.
Marketech International (MIC), a major cleanroom system engineer and equipment manufacturer, is an OEM for ASML's extreme ultra violet (EUV) machine system modules. It has seen orders from Chinese customers pour in in 2022 and expects they will support performance in 2023. MIC also built a new factory in Nantong, Jiangsu province, recently with the support of the local government and long-term orders from Chinese customers.
Wafer foundries are also benefiting from transfer orders resulting from the China exodus. European and US companies, including Qualcomm, MPS, and the world's largest analog IC maker Analog Devices (ADI), have already negotiated orders for power management ICs (PMIC), as well as an accelerated timetable for wafer starts.
