US to dwarf China in advanced chip making capacity by 2032, report finds – South China Morning Post
The US is expected to triple its domestic semiconductor manufacturing capacity by 2032 and dwarf China’s output in advanced chips, according to a report published by the US-based Semiconductor Industry Association (SIA) and Boston Consulting Group (BCG).
The US would grow its share of advanced chips, those below 10-nanometres for applications such as the latest smartphones, to 28 per cent by 2032, while mainland China is expected to account for just 2 per cent of that category in the same time frame, according to the report released on Wednesday.
In 2022, global capacity for production of sub-10-nm chips was dominated by Taiwan and South Korea with 69 per cent and 31 per cent of the share, respectively.
The expected catch-up by the US is partly attributed to the Chips and Science Act that Washington passed in 2022 to boost the country’s chip-making capacity.
For instance, the world’s biggest contract chip maker, Taiwan Semiconductor Manufacturing Co (TSMC), has agreed to build a 2-nm plant in Arizona as part of a planned total investment of US$65 billion in the state.
The US is forecast to hold a 14 per cent share of the world’s chip manufacturing capacity by 2032, but Taiwan and mainland China will continue to lead in global wafer fabrication capacity with 21 per cent and 17 per cent respectively by 2032, according to the report.
Beijing has provided more than US$142 billion in government incentives to build up its domestic semiconductor industry with the goal of reaching 70 per cent self-sufficiency by 2025, amid tightening US sanctions on high-end technologies.
China has achieved a three-fold increase in wafer fab capacity between 2012 and 2022, while the US only had an 11 per cent capacity increase in the same period.
Mainland China now has over 3,000 fabless companies – enterprises that design chips, but outsource the manufacturing – with double-digit annual revenue growth, the report said.
The SIA/BCG report said the mainland’s domestic chip designs have focused on consumer electronics, industrial control systems and intelligent devices, but are “less competitive in advanced CPUs, GPUs, and FPGAs and corresponding higher servers and computer power management”.
However, China is still taking the lead in global capacity for assembly, test and packaging facilities, with a 30 per cent share compared with 27 per cent for Taiwan.
Out of 36 such facilities announced since 2020, 25 are projected to be in mainland China and Taiwan.
Mainland China and Taiwan will continue to hold the largest share of global assembly, test and packaging capacity due to “lower construction and skilled labour costs”, the report said.
