According to SEMI’s market research group, China isn’t slowing down. SEMI is forecasting China’s capacity to keep growing at a significant rate over the next few years. For 300mm, SEMI expects China to have 29% of the worldwide capacity in 2026, increasing from 21% in 2022 (Figure 2). The 200mm capacity is expected to grow from 16% to 24%. And foundry capacity is expected to reach 42% in 2026 up from 27% in 2022, outpacing the Taiwan foundry capacity expansions.
China has its goal set on being more chip-independent and spending less than $300 billion a year on importing semiconductors. To accomplish these goals, they are spending a lot of money on fabs and equipment, and in some cases forming JVs to get the right chips for their industries. So, will the European and US CHIPS Acts help to increase Europe’s and the US’s capacity? A little, but as Peter Wennink recently commented, the EU chip goal is unrealistic. I’ll add in as is the CHIPS Act in the US. China has a significant head start and it will take significant investment by the EU and US to catch up, and it is unlikely politicians and shareholders will continue to fund the exercise to reach the desired goal of 20%. (my bold)
The chart:
The bad news for equipment companies outside of China is that due to sanctions against foreign companies selling certain types of equipment, as well as China trying to create an independent chip market, Chinese semiconductor equipment companies are seeing above-market growth. Naura Technology, AMEC, and ACM Research at mid-year of 2023 are seeing 68%, 27%, and 47% growth respectively over 2022. Most of this is driven by the China market.
The Chinese, pre-sanctions, were not pushing indigenous chip capacity. Chinese companies preferred American, Taiwanese and US chips, seeing them as more reliable than domestic alternatives.
A chip act might have made sense IF the US was genuinely going to re-shore production, far beyond chips or IF it was going to go to war within the next two to three years.
As it is, all it will accomplish in the end is losing the Western absolute advantage in chips and transferring the market leading position to China.
Which brings us to this beautiful, semi-related bit of news:
This is great news. Daleep has already helped this Administration navigate some tough challenges, and there’s no kinder or more capable colleague. https://t.co/6OiywjPuA9
— Bharat Ramamurti (@BharatRamamurti) February 16, 2024
The effect of anti-Russia sanctions was to make Russia into the world’s fifth largest economy while massively ramping up their weapons production and overall growth rate. Germany has slipped to sixth and Russia is now a firm Chinese ally. It is true that America is making more money by supplying Europe with expensive fossil fuels, but by any rational assessment, anti-Russia sanctions strengthened America’s self-declared enemies, and weakened its allies.
In other words, the policy that Daleep was the architect of was a disaster. Yet he is lauded as capable rather than as a complete fuckup. To be fair, I suppose, he was undoubtedly following orders, but he owns the orders he follows unless he objected to them and predicted their failure.
All of this applies, times ten, to anyone involved in the anti-China sanctions, which have backfired catastrophically.
America, land of the highly paid incompetent fuck up.
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Feral Finster
Expect the “China Joe” set to throw out wild allegations about this was all at the behest of Beijing.
There is no master plan here. Biden’s simply a halfwit.
EGrise
“America, land of the highly paid incompetent fuck up.”
Sometimes I wish I could land one of those gigs… but I’d be found out eventually
Purple Library Guy
@EGrise You mean, you might end up accidentally doing something right?
mago
Señor Fenster posits that Brandon is a half wit.
He’s more dangerous than that as he is a rabid dog fully intent on foaming at the mouth blood dripping from the fangs destruction of everything and anything that poses a threat to his occluded eyes and toxic ideologies.
A raging idiot front man for the billionaire “ruling” class who are clueless outside their domain, which they consider all encompassing and dominant forever and ever.
Buena fucking suerte with all of that.
The universe has got your number. . .
anon
A bit off topic but highly paid incompetent fuck ups run every aspect of government leadership from the local level to Washington DC. I’m active on a no-Covid forum for people who still mask, use air purifiers, and take precautions that most have largely abandoned. Someone who still masks asked if it would be a good idea for him to go into public health. The overwhelming responses said no and brought up the immense amount of public health fuckups from the CDC to local city health departments that failed to keep their communities safe and saw tens of thousands of people die in their cities. Rather than be fired, they’ve been given awards, favorable press, and six figure salaries for simply offering Covid tests! The public health directors where I live do not regularly mask and I’ve seen none of them publicly advocate for better air purification in buildings. These “leaders” are placed in their positions to maintain the status quo, not to offer a different vision that will challenge it. I’m assuming that goes for every other department in government. As long as the economists and foreign policy advisors at the White House are anti-Russia and anti-China they will be in favor with the DC elite and mainstream media no matter how much their policies disadvantage Americans and our allies.
Carborundum
This is wafer size not process.
Feral Finster
@mago: don’t confuse Biden with those around him.
Admittedly, he was a duller sort of sociopath long before he became senile.
Jan Wiklund
Daleep was perhaps paid by the Indian government to do it.
Or perhaps not. The North Atlantic ruling class has generally behaved like the Suicide Squad in Life of Brian since at least the 90s. They don’t need any enemies.
The Life of Brian cut: https://www.youtube.com/watch?v=NUHk2RSMCS8.