[News] Global Chip Equipment Sales Plummet by 11%, Taiwan Nearly Halves, China Breaks Records

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In the Q3 of 2023 (July-September), global sales of semiconductor manufacturing equipment faced a substantial 11% decline, marking the most significant drop in four years and the second consecutive quarter of contraction. Notably, Taiwan’s market saw a nearly 50% reduction in sales, while the Chinese market achieved a historic step, crossing the 40% threshold of the global sales share for the first time, according to the report by Semiconductor Equipment Association of Japan (SEAJ).

In collaboration with the International Semiconductor Industry Association (SEMI), SEAJ gathered data from over 80 global semiconductor equipment companies. According to the “Semiconductor Manufacturing Equipment(World Wide SEMS Report)” released on December 1st, global chip equipment sales for Q3 2023 dropped by 11% to USD 25.6 billion compared to the same period last year, marking the second consecutive quarter of contraction.

Analyzing regional sales, Taiwan’s market sales dwindled to USD 3.77 billion, a nearly 50% decline from the same period last year (USD 7.28 billion), ranking it as the market with the highest contraction among the top 6. Conversely, the Chinese market experienced a remarkable 42% surge, reaching USD 11.06 billion, constituting 43% of the global sales for the first time and surpassing the 40% mark. This solidifies China’s position as the world’s largest semiconductor equipment market for the second consecutive quarter. Japan witnessed a substantial 29% drop to USD 1.82 billion, North America decreased by 5% to USD 2.5 billion, Europe grew by 2% to USD 1.7 billion, and South Korea faced a significant 19% decrease to USD 3.85 billion.

SEAJ highlighted that compared to the previous quarter (April-June 2023), global chip equipment sales in the last quarter decreased by 1%. In this context, the Chinese market saw a remarkable 46% increase, Taiwan witnessed a steep 34% decrease, South Korea plummeted by 32%, Europe grew by 5%, North America saw a significant 15% decrease, and Japan experienced a substantial 19% increase.

 

TEL’s Revised Outlook and China’s Rising Impact

Tokyo Electron Limited (TEL), a major player in the Japanese semiconductor equipment industry, released financial data on November 10. Despite delays in investments for advanced process and foundries, the company is experiencing a substantial increase in investments from Chinese customers, especially in mature process. Consequently, TEL has revised its global market size estimate for semiconductor front-end manufacturing equipment (wafer fab equipment, WFE) for the year 2023. The initial estimate made in August, which projected a market size of USD 70-75 billion (a YoY decrease of 25-30%), has been adjusted to USD 85-90 billion (a YoY decrease of 10-15%). Notably, in the last quarter (July-September), the Chinese market’s contribution to TEL’s overall revenue exceeded 40% for the first time.

TEL CEO Toshiki Kawai said, “We have seen around 20 to 30 new customers, and going forward we expect to see the Chinese market grow even further.” Kawai also added, “We have already received inquiries from China for CY2024, so we can expect some visibility. Our forecast for the first half of CY2024 in particular shows that China will continue to represent around 40% of sales by region.”