TOKYO -- Global spending on new semiconductor production sites and equipment is projected to reach $50 billion in 2020, with mainland Chinese and Taiwanese companies driving a recovery from a slump that began in late 2018.
The forecast announced Thursday by U.S.-based industry group SEMI represents a 32% rise from the estimated total for 2019.
It calls for 18 projects to enter into construction in 2020, up from 15 this year, though some work could be delayed amid a cooling global economy and the U.S.-China trade war.
The projections show how mainland China is fast becoming a major force in semiconductor investment.
China, where Beijing is promoting domestic self-sufficiency in memory and other chips, accounts for 11 of these projects, worth $24 billion. Taiwan, a hub for leading chip foundries such as Taiwan Semiconductor Manufacturing Co., is another heavy contributor to the total at nearly $13 billion.
But weak memory prices are seen cutting investment in South Korea, home to industry giants such as Samsung Electronics and SK Hynix. The country ranked as the largest buyer of chipmaking equipment in 2018.
Chinese moves in semiconductors include plans by the country's second-largest mobile chipmaker, UNISOC Communications, to release a 5G chipset in 2020 to catch up with global leaders such as U.S.-based Qualcomm. Huawei Technologies' chip arm, HiSilicon Technologies, aims to have one ready as early as this year.
SEMI's projections cover facilities for preprocessing, such as circuit etching, which make up the bulk of chipmakers' capital investment.
The forecast contains a note of uncertainty. Eight of the 18 expected projects, totaling more than $14 billion, have a "low probability of materializing," the report says. Protracted trade friction between Washington and Beijing could dull chipmakers' appetite for investment if demand from tech companies falls.
This is especially true in China, where many of these projects are regarded as less certain. Excluding those leaves just four probable projects valued at $9.6 billion.
