China’s Rise in Chip Manufacturing Threatens South Korea’s Semiconductor Reign

A semiconductor market research institute predicted South Korea will rank third in semiconductor production this year, following Taiwan. The institute also suggests that China, which has bolstered its semiconductor production capacity by 13% compared to last year, is poised to ascend to the top spot.

On the 8th, the Taipei Times reported, citing data from the Semiconductor Equipment and Materials International (SEMI), that South Korea’s semiconductor production capacity (based on 8-inch wafer conversion) in 2024 is projected to increase by 5.4% from the previous year, reaching 5.1 million units per month. This forecast translates to an annual production of 61.2 million units. China and Taiwan are expected to take the first and second spots, with production capacities of 8.6 million and 5.7 million monthly units, respectively.

SEMI predicted, “With strong government support measures backing it, China will claim the world’s top spot,” while “South Korea’s production volume will rank third, following Taiwan.” Japan, the Americas, and Europe will secure the fourth to sixth positions in the global semiconductor production rankings.

As the semiconductor market has passed its low point and demand is recovering, production capacity is predicted to increase globally. The number of new facilities starting semiconductor mass production this year is set to be 42, nearly four times the 11 of last year. Among these, pure-play foundries specializing in manufacturing semiconductors based on external designs rather than designing them in-house will claim the largest share.

The monthly production volume of pure-play wafer foundries is projected to increase from 9.3 million units last year to 10.2 million units this year. Additionally, the production volume of memory semiconductors, including DRAM, is expected to see a 2% growth from 2023, reaching 3.8 million units per month.

In a report via the Taipei Times, Ajith Manocha, CEO of SEMI, remarked that every month’s global semiconductor production capacity has reached a new milestone, exceeding 30 million, marking a significant 6.4% increase compared to the previous year. He further noted the unprecedented surge in market demand and the consequential escalation in investments for production facilities across key regions.

By. Geun Ho Lee