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Business trends

Chip equipment sales soar to record levels

South Korean and Chinese semiconductor makers ramp up investments

Tokyo Electron Miyagi, a maker of chipmaking equipment, plans to double production to meet soaring demand. (Photo courtesy of Tokyo Electron)

TOKYO -- Global sales of semiconductor manufacturing equipment are expected to top $60 billion this year after a record 2017 as China continues to cultivate its chipmaking industry.

Industry association SEMI reported Monday that chip equipment sales in 2017 rose 37% to $56.6 billion, the first record in 17 years. The group expects further growth this year as greater need for memory devices with large storage capacities, such as 3D NAND flash memory and DRAM, in smartphones and data centers drives chip demand.

South Korea had the largest market for new semiconductor equipment in 2017, spending about 130% more than the previous year at $17.95 billion thanks to greater capital investment from Samsung Electronics and others.

Chinese new equipment sales also rose 27% to $8.23 billion as the government makes large investments to develop the domestic semiconductor industry. China is expected to become the world's largest market in 2019 for equipment used in the pre-processing phase, which includes wafer production, as well as the post-processing phase.

Manufacturers of semiconductor equipment have stepped up investment to raise output in response to such brisk sales. Tokyo Electron Miyagi, a member of the Tokyo Electron group that makes etching devices, plans to roughly double its production capacity by October this year.

Japanese chipmaking equipment supplier Screen Holdings is also raising capital investment for the current fiscal year by 40%, adding a new building to its Hikone plant for about 9 billion yen ($84.1 million). The addition will increase the facility's production capacity by half if operational by December.

The outlook for the semiconductor equipment market is also bullish despite concern that rising yields will lower prices for 3D NAND flash memory. Tokyo Electron believes that lower prices will only serve to expand the market.

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