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South Korea and Taiwan will nonetheless be key semiconductor hubs in years to come back, at the same time as stress to diversify provide chains results in new competitors from locations such because the US and Germany, in response to the chief government of US chipmaking tools provider MKS Devices.
John TC Lee, president and chief government of MKS, added that the present stoop within the chip market was only a cyclical downturn, and that the trade was nonetheless on observe to develop at a “wholesome charge” within the medium to long run.
“We’ve been by means of [this] many occasions,” stated Lee in an interview with Nikkei Asia. “Possibly the chip trade capital spending would go all the way down to $70bn in [2023] from 2022. However you already know, I’ve been on this trade a very long time. Ten years in the past that quantity was $35bn, and that was an excellent yr. Now we are saying $70bn is a foul yr.”
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 tools makers as clients, together with Utilized Supplies and Lam Analysis.
Chipmakers depend on MKS’s RF energy sources to etch extraordinarily advantageous transistors, particularly for cutting-edge processors and 3D NAND flash reminiscence chips. In response to the corporate’s estimate, 85 per cent of the world’s chipmaking tools makes use of its applied sciences.
On the query of provide chain shifts, Lee expects South Korea and Taiwan will nonetheless be vital centres of chipmaking sooner or later regardless of main economies pushing to onshore important areas of manufacturing.
“So long as Samsung, SK Hynix and TSMC stay chip leaders, I feel Korea and Taiwan will proceed to be vital international locations for semiconductor manufacturing,” Lee informed Nikkei Asia. He stated for many superior chip vegetation, the core applied sciences would in all probability 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 outdoors commentators from all over the world share their views on Asia, whereas our Asia300 part gives in-depth protection of 300 of the largest and fastest-growing listed firms from 11 economies exterior Japan.
However the chief government stated extra such chip “hubs” would in all probability emerge, particularly within the US and European international locations reminiscent of Germany. “It’s possibly not as environment friendly to start with 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 pattern of units needing ever extra chips would additionally assist extra hubs to flourish, he stated. “The variety of chips will certainly proceed to develop in years to come back,” the CEO added.
However the semiconductor trade is not a spot for small firms, he cautioned, as the larger gamers will solely get larger. “Within the Nineteen Nineties, firms that had $20mn or $30mn in income have been advantageous,” he stated. “Now you possibly can’t try this as a result of the issues that we have now to resolve now are so tough. That requires a number of engineering, and a number of sustained engineering over a number of years.”
MKS has made a number of acquisitions over the previous few years to develop its product portfolio and scale. In 2021 it acquired Photon Management, a provider of optical sensors for temperature management utilized in chipmaking. The next yr it purchased the speciality chemical substances firm Atotech.
The acquisitions not solely assist MKS develop the scope of its enterprise but additionally its manufacturing footprint, Lee stated. The corporate has manufacturing websites within the US, China, Mexico, Singapore, Malaysia, Thailand and different international locations all over the world.
Lee added that the unprecedented provide chain constraints of the previous two years made folks realise how vital chips and their ecosystems have been.
“The provision chain constraints awakened all people. There’s a number of ecosystems and help that go all the best way again to your mining of minerals . . . While you begin investigating the place’s the constraint, you retain happening 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 stated.
A version of this article was first revealed by Nikkei Asia on January 30 2023. ©2023 Nikkei Inc. All rights reserved.
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