Sales of chip factory equipment are growing rapidly

According to SEMI, which represents the manufacturers of chips and machines for their production, sales of factory equipment reached a record $ 71.19 billion last year, which represents a 19% increase compared to 2019. And this is of course only the beginning, because only this year Companies such as Samsung, Intel, and especially TSMC have started to sharply increase their expenses, a large part of which will also go to the purchase of new equipment, and it will not be different in the coming years. 

Here we have a distribution of purchases by region, which shows that China overall did not lag behind and, on the contrary, rose to first place ahead of Taiwan in terms of total volume. However, we will see how it will be this year, for example, TSMC increases operating expenses from 17.2 billion to $ 30 billion compared to the previous year, and South Korean manufacturers will behave similarly, with equipment sales growth last year mainly due to them, as can be seen from the increase by 61 percent.

The causes of all this are obvious. According to SEMI, this is basically a sharply increasing demand for chips, with it growing in the coming years. Furthermore, an escalation of the duel between TSMC and Samsung is expected, then it is also a matter of the fact that the new generation of production equipment for EUV and DUV is more expensive, ie factory equipment is becoming more expensive overall. And finally, it is precisely the Chinese companies that are being pushed by the trade war with the USA and the decision of the Chinese government to set the direction towards self-sufficiency in the production of chips. 

From the numbers, it also seems that Taiwan is lagging behind, which is, of course, true overall. However, the fact that the local company UMC has started to focus more on special and advanced processes, which has significantly reduced its investment in new equipment in the last year, and TSMC itself has at least matched its 2019 figures with its investments. Wan companies have lagged behind overall, and in the case of TSMC, the opposite will be the case in the next three years (including this year), as the company plans to reach a total of $ 100 billion in capital expenditures. 
As for the South Koreans, investment is mainly driven by Samsung and SK Hynix, with the latter planning to build a huge $ 106 billion mega-factory, but not until mid-decade. 
However, investment in North America has stalled, although with the planned 5nm plant from TSMC, which Samsung would like to add, and also with the announced two factories in Arizona to be built by Intel, investments will also increase there.
And as for Europe, it also allegedly attracts Samsung and TSMC, and we also have Intel in Leixlip, Ireland, which plans to start production using a 7nm process, and Intel should build a brand new factory in Europe, but it is not yet clear whether it will again be Ireland, or Israel (in this respect also considered Europe), or perhaps another country. 

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