Prices of Used Semi Tools Soar as China Ups Investments

Prices of Used Semi Tools Soar as China Ups Investments

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Chinese companies account for only 4% of global semiconductor revenue (according to IC Insights), but the country is increasing investments in new fabs and is projected to account for about 20% of global chip fabrication capacity this year. Since it is not easy to procure new equipment these days, especially for companies like SMIC, China-based semiconductor firms are actively buying used tools, so their prices are skyrocketing. 

Demand for chips is setting records these days, which is why virtually all makers of semiconductors, as well as chip testing and packaging houses, are aggressively expanding production capacity. Makers of semiconductor manufacturing tools, such as Applied Materials, ASML, and KLA, cannot keep up with the demand for leading-edge equipment and relatively mature devices. Lead times for most new tools are now around a year or more. By contrast, used tools can be acquired within a month.

(Image credit: IC Insights)

Brokers and leasing companies procure these tools from leading chipmakers that no longer use them and resell them to makers of semiconductors that use mature process technologies. As a result, demand for these machines is increasing along with prices. Nikkei reports that prices of used semiconductor equipment doubled in the last couple of years. 

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