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North America chip equipment spend to drop as other regions gain - FierceElectronics

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Spending on semiconductor manufacturing equipment in North America is expected to decline over the next two years while the rest of the world sees growth.

Of all the major regions in the world, only Taiwan joins North America in a flattening or actual decline through 2022.

The sobering forecast was released on Tuesday in Tokyo by SEMI, an industry association representing 2,400 companies globally.  

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North America will see $6 billion in equipment purchases in 2022, down from $8.1 billion in 2019, SEMI forecast. 

Taiwan will see spending remain roughly flat over the period, moving from $17.1 billion in 2019 to $17.2 billion in 2022, SEMI said.  Taiwan was the top purchaser of SEMI equipment in 2019 but has dipped into second behind China in 2020.

Meanwhile, SEMI reported that Korea will see the most sales of chip manufacturing equipment in 2022, at nearly $20 billion, up from nearly $10 billion in 2019.  In 2022, China will spend $15.6 billion on equipment, up from $13.4 billion in 2019.

Other regions will improve through 2022, including Japan and Europe, SEMI said.

Overall, sales of semiconductor manufacturing equipment will nearly reach a record of $68.9 billion in all of 2020, an increase of 16% over 2019. Growth globally will advance in the next two years as well, reaching $71.9 billion in 2021 and $76.1 billion in 2022, SEMI said.

SEMI said growth will come in the wafer fab equipment segment as well as the assembly and packaging equipment segment.  Spending on NAND flash making equipment will surge 30% in 2020, surpassing $14 billion.

While SEMI did not comment directly on the downward North American trend, CEO Ajit Manocha issued a statement on December 4 supporting federal incentives for the U.S. microelectronics industry.  That included a thanks to the sponsors of electronics research provisions in the National Defense Authorization Act, which has passed both the House and Senate with strong bipartisan support.

However, the White House said last week it strongly opposes the $740 billion Act because “it fails to include critical national-security measures, includes provisions that fail to respect our veterans and our military’s history and contradicts efforts by this Administration to put America first in our national security and foreign-policy actions.”

Trump tweeted on Sunday that he would veto the act on the grounds that the “biggest winner of our new defense bill is China!”

Congress likely has sufficient votes to override the president’s veto, which passed the House with 335 votes and the Senate by 84-13.

One provision in the NDAA, a 4500-page bill, makes researchers for federal grants disclose the amount, type and source of their current funding to counter moves by China to obtain cutting edge technologies by tapping into work funded by the U.S., according to a synopsis provided in a Science report.

In his December 4 statement, Manocha also supported the CHIPS Act investment tax credit before Congress that “will provide the certainty needed to attract many more new, large-scale microelectronics manufacturing investments in the U.S.”

The CHIPS Act has gained broad semi industry support mid-year partly because the U.S. has seen a 50% decline in its share of global semi manufacturing capacity over the last two decades, according to SEMI and the Semiconductor Industry Association. CHIPS stands for Creating Helpful Incentives to Product Semiconductors for America.

RELATED: Chip equipment up 13% in May as industry backs CHIPS Act

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