South Korea and Taiwan will nonetheless be key semiconductor hubs in years to come back, whilst strain to diversify provide chains results in new competitors from locations such because the US and Germany, in accordance with the chief govt of US chipmaking gear provider MKS Devices.
John TC Lee, president and chief govt of MKS, added that the present stoop within the chip market was only a cyclical downturn, and that the business was nonetheless on monitor to develop at a “wholesome fee” within the medium to long run.
“We’ve been via [this] many occasions,” mentioned Lee in an interview with Nikkei Asia. “Possibly the chip business capital spending would go all the way down to $70bn in [2023] from 2022. However you realize, I’ve been on this business a very long time. Ten years in the past that quantity was $35bn, and that was 12 months. Now we are saying $70bn is a nasty 12 months.”
MKS is a supplier of electronics subsystems, together with radio frequency (RF) energy sources and lasers utilized in chipmaking and different fields, and has high world semiconductor gear makers as prospects, together with Utilized Supplies and Lam Analysis.
Chipmakers depend on MKS’s RF energy sources to etch extraordinarily superb transistors, particularly for cutting-edge processors and 3D NAND flash reminiscence chips. In accordance with the corporate’s estimate, 85 per cent of the world’s chipmaking gear makes use of its applied sciences.
On the query of provide chain shifts, Lee expects South Korea and Taiwan will nonetheless be necessary centres of chipmaking sooner or later regardless of main economies pushing to onshore very important areas of manufacturing.
“So long as Samsung, SK Hynix and TSMC stay chip leaders, I feel Korea and Taiwan will proceed to be necessary nations for semiconductor manufacturing,” Lee advised Nikkei Asia. He mentioned for many superior chip vegetation, the core applied sciences would most likely develop near the main gamers’ headquarters and later be deployed to different locations if wanted.
This text is from Nikkei Asia, a worldwide publication with a uniquely Asian perspective on politics, the economic system, enterprise and worldwide affairs. Our personal correspondents and out of doors commentators from world wide share their views on Asia, whereas our Asia300 part offers in-depth protection of 300 of the most important and fastest-growing listed firms from 11 economies outdoors Japan.
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However the chief govt mentioned extra such chip “hubs” would most likely emerge, particularly within the US and European nations reminiscent of Germany. “It’s possibly not as environment friendly at first however I feel as soon as a hub is established, it will get fairly environment friendly. And upon getting a number of fabs [fabrication facilities] in a single space, the infrastructure is now supporting a number of fabs, not only one.”
The overarching development of units needing ever extra chips would additionally assist extra hubs to flourish, he mentioned. “The variety of chips will certainly proceed to develop in years to come back,” the CEO added.
However the semiconductor business is now not a spot for small firms, he cautioned, as the larger gamers will solely get greater. “Within the Nineteen Nineties, firms that had $20mn or $30mn in income had been superb,” he mentioned. “Now you possibly can’t try this as a result of the issues that we now have to unravel now are so tough. That requires a variety of engineering, and a variety of sustained engineering over a number of years.”
MKS has made a number of acquisitions over the previous few years to broaden its product portfolio and scale. In 2021 it acquired Photon Management, a provider of optical sensors for temperature management utilized in chipmaking. The next 12 months it purchased the speciality chemical compounds firm Atotech.
The acquisitions not solely assist MKS broaden the scope of its enterprise but additionally its manufacturing footprint, Lee mentioned. The corporate has manufacturing websites within the US, China, Mexico, Singapore, Malaysia, Thailand and different nations world wide.
Lee added that the unprecedented provide chain constraints of the previous two years made folks realise how necessary chips and their ecosystems had been.
“The provision chain constraints awoke everyone. There’s a variety of ecosystems and help that go all the best way again to your mining of minerals . . . If you begin investigating the place’s the constraint, you retain taking place and down [the supply chain] and also you realise, ‘Wow, the whole world economic system has one thing to do with making a chip’,” Lee mentioned.
A model of this text was first printed by Nikkei Asia on January 30 2023. ©2023 Nikkei Inc. All rights reserved.
