Europe headed towards 5% share of global chip production
Europe’s dwindling share of global chip manufacturing by volume stood at 7.2 percent in 2020 and is headed towards 5 percent in 2025, according to data from the European Semiconductor Industry Association (ESIA).
As European wafer production is not at the leading-edge where the highest prices are paid for silicon, Europe’s market share by value is likely to be much lower.
The ESIA said it is providing insights into the manufacturing capacity trends for the regions around the globe because of the recent attention brought about due to the publishing of the European Chips Act (see European Chips Act coming February, says EC president).
The data comes from the industry organization SEMI via the World Semiconductor Council (WSC) and is derived from monthly wafer starts, normalised to 200 mm wafer equivalents.
World wafer fab capcity market share by country/region from 1995 to 2020. Source: ESIA
The data shows that Europe had 9.4 percent market share in 2015 but this had dropped to about 7.2 percent by 2020. That trend puts Europe on course to achieve 5 percent manufacturing capacity share by 2025. Given the length time it takes to construct wafer fabs, install equipment and bring them to come on stream, even if large-scale spending were to start immediately very little could be done to change the numbers before 2025.
In constrast, China was responsible for 14.4 percent of manufacturing capacity in 2015 but this had risen to 23.4 percent in 2020. China is on course to be responsible for about 32.4 percent of wafer starts in 2025. Much of China’s production is controlled by foreign companies such as SK Hynix, TSMC and Samsung.
US-imposed embargoes are denying China access to such technologies as extreme ultraviolet lithography and an ability to get to the leading-edge at present. China’s growth of chip production market share will be at the expense of all the other major regions.
Taiwan, Japan and South Korea only declined slightly from 2015 to 2020. In 2020 Taiwan had 18.2 percent, Japan had 18.0 percent and South Korea 15.7 percent, according to the ESIA chart. Taiwan, mainly due to the presence of foundry TSMC, manufactures most of the world’s leading-edge silicon at the 7nm and 5nm nodes with 3nm coming soon.
By 2025 Greater China – the People’s Republic of China and Taiwan – will hold 50 percent of all global chip manufacturing capacity.
Like Europe the US has been declining from 12.6 market share in 2015 to 10.4 percent in 2020. If nothing changes the trend will take the US down to an 8.2 percent share in 2025. However, the US is planning to spend large amounts of tax payers’ money to support production. It has also been more successful to date than other regions at obtaining commitments from manufacturers.
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