https://asia.nikkei.com/Business/El...=1&pub_date=20210301123000&seq_num=4&si=44594
China hoards used chipmaking machines to resist US pressure
Machines 'worthless several years ago' sell for $1 million
People cooped at home playing computer games have driven up demand for semiconductors. © Reuters
YOICHIRO HIROI, Nikkei staff writerFebruary 28, 2021 04:20 JST
TOKYO -- Chinese semiconductor makers are snapping up used chipmaking machines as they rush to produce homegrown products amid U.S.-Sino trade tensions, driving up equipment prices in Japan's secondary market.
Japanese used equipment dealers say prices are up by 20% from last year. Older-generation machines are not restricted by U.S. sanctions on China, giving Chinese players unfettered access.
The stay-at-home trend spurred by the coronavirus pandemic is also a factor. As chip demand rises worldwide, even equipment that is not the most up-to-date is selling at a brisk pace. This, in turn, could prolong the shortage of semiconductors used in automobiles.
To gauge market trends, Nikkei interviewed major dealers of used machines, which are sold mostly through individual transactions.
"Prices on used machines are rising every year," said a source at a major leasing company. "Over the past year, the prices have gone up 20% on average." Prices on core equipment, such as lithography systems, have risen by a factor of three.
A Sumitomo Mitsui Finance and Leasing source says prices have gone up tenfold compared with right after the 2008 financial crisis.
"Nearly 90% of used machines appear to be headed to China," said a source at Mitsubishi UFJ Lease & Finance.
Beijing is pushing to increase domestic production of semiconductors as the U.S. restricts access to its chipmaking technology by Chinese companies. As U.S. sanctions limit China's access to cutting-edge technologies, Chinese manufacturers are hoarding older-generation equipment.
"I've heard that some Chinese makers are just buying up machines even if they don't use them right away," said one market source.
The pandemic is also contributing to the popularity of used machines. Demand is brisk for driver ICs used for TV and PC displays, and power management chips used in connected home appliances. Those chips are made from 200mm wafers using older-generation equipment.
Since new chipmaking lines use 300mm wafers, not many companies are producing machines for 200mm wafers. As a result "prices on immediately available used machines are higher than those for brand-new machines," said a source at Hitachi Capital.
"Machines that were basically worthless several years ago are now selling for 100 million yen [$940,000]," according to a source at a used equipment dealer. In production lines, 20- to 30-year-old machines are operating.
"Machines we bring in are shipped directly to the next plants," said an official at Sumitomo Mitsui Finance and Leasing. "They literally disappear instantly." The company decreased storage space for used machines it rents in Taiwan last year.
Some manufacturers of chipmaking machines see the revival of older machines as a business chance. Canon, for example, will release lithography equipment for 200mm wafers for the first time in nine years. But other equipment, such as machines used for etching and cleansing, is necessary to produce semiconductors, leaving manufacturers reliant on older machines.
China hoards used chipmaking machines to resist US pressure
Machines 'worthless several years ago' sell for $1 million
People cooped at home playing computer games have driven up demand for semiconductors. © Reuters
YOICHIRO HIROI, Nikkei staff writerFebruary 28, 2021 04:20 JST
TOKYO -- Chinese semiconductor makers are snapping up used chipmaking machines as they rush to produce homegrown products amid U.S.-Sino trade tensions, driving up equipment prices in Japan's secondary market.
Japanese used equipment dealers say prices are up by 20% from last year. Older-generation machines are not restricted by U.S. sanctions on China, giving Chinese players unfettered access.
The stay-at-home trend spurred by the coronavirus pandemic is also a factor. As chip demand rises worldwide, even equipment that is not the most up-to-date is selling at a brisk pace. This, in turn, could prolong the shortage of semiconductors used in automobiles.
To gauge market trends, Nikkei interviewed major dealers of used machines, which are sold mostly through individual transactions.
"Prices on used machines are rising every year," said a source at a major leasing company. "Over the past year, the prices have gone up 20% on average." Prices on core equipment, such as lithography systems, have risen by a factor of three.
A Sumitomo Mitsui Finance and Leasing source says prices have gone up tenfold compared with right after the 2008 financial crisis.
"Nearly 90% of used machines appear to be headed to China," said a source at Mitsubishi UFJ Lease & Finance.
Beijing is pushing to increase domestic production of semiconductors as the U.S. restricts access to its chipmaking technology by Chinese companies. As U.S. sanctions limit China's access to cutting-edge technologies, Chinese manufacturers are hoarding older-generation equipment.
"I've heard that some Chinese makers are just buying up machines even if they don't use them right away," said one market source.
The pandemic is also contributing to the popularity of used machines. Demand is brisk for driver ICs used for TV and PC displays, and power management chips used in connected home appliances. Those chips are made from 200mm wafers using older-generation equipment.
Since new chipmaking lines use 300mm wafers, not many companies are producing machines for 200mm wafers. As a result "prices on immediately available used machines are higher than those for brand-new machines," said a source at Hitachi Capital.
"Machines that were basically worthless several years ago are now selling for 100 million yen [$940,000]," according to a source at a used equipment dealer. In production lines, 20- to 30-year-old machines are operating.
"Machines we bring in are shipped directly to the next plants," said an official at Sumitomo Mitsui Finance and Leasing. "They literally disappear instantly." The company decreased storage space for used machines it rents in Taiwan last year.
Some manufacturers of chipmaking machines see the revival of older machines as a business chance. Canon, for example, will release lithography equipment for 200mm wafers for the first time in nine years. But other equipment, such as machines used for etching and cleansing, is necessary to produce semiconductors, leaving manufacturers reliant on older machines.
