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silicon wafer colourful

China silicon wafer production capacity growth ‘fastest in the world’, says Semi

January 10, 2019 by Mai Tao

The growth in silicon wafer production capacity in China is the “fastest in the world”, according to a report by industry association Semi.

Semi says China is “unwavering in its drive to build a strong, self-sufficient semiconductor supply chain”.

The country is planning more new fab projects than any other region in the world from 2017 to 2020, and its expansion of fab capacity recently picked up pace on the strength of new foundry and memory projects from both domestic and foreign companies, according to Semi’s 2018 China Semiconductor Silicon Wafer Outlook report. 

China’s installed fab capacity is forecast to grow at a 12 percent annual growth from 2.3 million wafers per month in 2015 to 4 million wpm in 2020, faster than all other regions.

Well known for its semiconductor packaging prowess, China in recent years shifted its focus to front-end semiconductor fabs and a few key material markets.

In 2018, the region’s surge in fab investment thrust it past Taiwan as the second largest capital equipment market in the world, behind only Korea.

However, China’s semiconductor manufacturing growth faces strong headwinds. Chief among them is the tight supply of silicon wafers over the past two years due in large part to the sector oligopoly’s firm control of global production, with the top five wafer manufacturers accounting for over 90 percent of market revenue.

In response, China’s central and local governments has made the development of its domestic silicon wafer supply chain a key initiative, funding multiple silicon wafer manufacturing projects.

According to the 2018 China Semiconductor Silicon Wafer Outlook report, many of China’s domestic silicon suppliers capably provide wafers 150mm in size and smaller.

And the while the region lags peers in 200 mm and 300 mm processing technology and capacity, strong domestic demand and favorable policies have fueled progress in 200 mm and 300 mm silicon manufacturing with some Chinese suppliers having reached key large-diameter manufacturing milestones.

However, it will take these new suppliers several years before they can meet capacity and yield requirements of the larger-diameter silicon wafer market.

Company plans and announcements indicate that by the end of 2020, total silicon supply capacity in China will reach 1.3 million wpm for 200 mm, possibly leading to a slight oversupply, and 750,000 wpm for 300 mm.

China’s equipment suppliers, particularly crystal furnace vendors, are also investing in the development of 300 mm wafer manufacturing, and domestic tool suppliers have developed most of the necessary tools for wafer manufacturing, except for inspection.

While China’s silicon wafer suppliers continue to lag international peers in manufacturing capabilities, the region’s silicon manufacturing ecosystem is maturing and becoming better integrated.

The sector’s growth is driven and accelerated by significant domestic market demand and favorable policies.

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Filed Under: Computing, News Tagged With: semi, silicon wafer production, wafer production capacity

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