China to Become a Major Force in Semiconductors-cover tape|carrier tapes|NEXTECK

China to Become a Major Force in Semiconductors

Procurement professionals can expect an increase in supply and lower prices for some semiconductors once China ramps up production of integrated circuits, Nexteck Singapore Pte Ltd also expect packing materials of Reel and tape for WLCSP carrier and cover tape increase in demand in our China region sales.

OEMs can expect procurement managers to be making more business trips to China in the near future as the country becomes a more significant player in the global chip industry.

For two decades now, China has been known as the world’s low-cost manufacturing center for electronics equipment built by large global electronics manufacturing services (EMS) providers such as Jabil, and others. But the country’s recent investment in semiconductor manufacturing is changing that perception as China looks to compete directly with South Korea and Taiwan for a share of the global chip market.

China is making huge investments in development and production of semiconductors and has set some lofty goals for its chip industry. For instance, it wants to produce semiconductors using 16/14nm process technologies and make chips on 450mm wafers by 2020, according to IC Insights.

Chip Independence

China is investing in semiconductor development because it is intent on displacing many foreign-made semiconductors used in domestically manufactured electronics systems. But the semiconductors produced in China will also be sold globally. Today China imports over 80% of all the chips for equipment manufactured in China. Government has said China needs to become “self-sufficient” in the materials used in production, which includes integrated circuits.

The impact of China’s penetration into the semiconductor market on a large scale may not be felt for several years. The industry beleived 2018 is the window where there will be meaningful production in NAND. The market strongly believed that China can introduce a 3D NAND part by the end of this year, they will be more competitive at the end of 2020.

From a buyer’s perspective, China’s entry into the chip manufacturing business is a good thing, because it will mean more competition and lower prices, according to Howard. And from a supplier’s perspective, it may not necessarily be bad news because more NAND demand will be created.

More competition in the semiconductor industry will be welcome news for procurement professionals as the chip industry has consolidated significantly over the last three years, resulting in fewer supplier choices for some semiconductors and packing materials of precision WLCSP carrier tape and cover tape, supplied by Nexteck Group China regional office.

Indeed, some governments, including Japan, Taiwan and the U.S., are suspicious of IC technology sharing as a result of mergers and acquisitions taking place between their domestic companies and Chinese companies, according to IC Insights. As a consequence, the U.S. has banned the export of some high-technology products to China.

China to Become a Major Force in Semiconductors

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