By Li Panpan
(JW Insights) Sep 14 -- More than 140 semiconductor material projects with a total investment of more than RMB300 billion ($41.20 billion) made new progress (signing, start/completion, production) in 2022 in China, accounting for the highest 27% of the total in the semiconductor industry in the year. This signals accelerated localization and self-sufficiency of semiconductor materials in the country, reported JW Insights.
Chen Yuenan, an analyst at JW Insights' Consulting Division, said, "New wafer fabs have become the new focus of Chinese semiconductor material players to increase market share. Judging from their start-up time, the production capacity release will be from 2024 to 2025. A large amount of equipment and material verification needs will be determined in 2023-2024, which is a good time for domestic substitution."
The upsurge in signing contracts for those projects appeared in the first half of the year, while that in project completion occurred in the second half, which is quite tight in the project cycle. Q2 and Q3 of the year tend to see the climax of project construction.
By location, Jiangsu Province in eastern China led the country made progress with more than 30 semiconductor material projects in 2022. It was followed by Zhejiang Province also in the east and Guangdong Province in the south, both with more than 14 projects. The others in the top 5 were the provinces of Anhui in the east and Hubei in the north.
Jiangsu has advantages in building semiconductor material production capacity and attracting investment. The clustering of upstream wafer manufacturing and packaging and testing factories in the province has brought essential attractions, including Leading fabs such as Huahong ( in Wuxi City) and TSMC (in Nanjing City), as well as packaging and testing top players such as JCET (In Wuxi) and Tongfu Microelectronics (in Nantong).
In manufacturing, the construction of silicon wafer production lines was the most popular, accounting for nearly 30%, with silicon sizes covering 6, 8, and 12 inches. Their total investment exceeded RMB70 billion ($9.61 billion).
Regarding packaging materials, the production capacity construction of packaging substrates was trendy, with a total investment of more than RMB75 billion ($10.30 billion).
More than 50 projects of the total were newly signed ones in 2022. Among them, photoresist, lead frame, sputtering target, electronic special gas, packaging substrate, substrate, and epitaxial wafer were still the primary materials in production expansion.
More than 13 projects were about packaging substrates, with a total investment of more than RMB30 billion ($4.12 billion). Over six were third-generation semiconductor material projects, with a total investment of more than RMB20 billion ($2.75 billion).
In terms of production capacity release, packaging substrates, third-generation semiconductor (gallium nitride/silicon carbide) wafer materials, and large silicon wafers (12 inches) were the three hot directions, accounting for nearly half of all the projects with new progress in 2022. It indicates that the production capacity of those products will be released in 2023.
