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The Coming Glut of ICs
Fortune, says, a shift has taken place and the world will soon be awash in chips. Lillian Li, vice president and senior credit officer at Moody’s, says, "All the world’s advanced economies, including the U.S., the EU, South Korea, and China have set out plans to advance capacity in the domestic semiconductor industry."
Moody's Li says that because China is the country most interesting in building its domestic chip supply, it also could find itself with a huge glut of semiconductors.
Li adds, "For China, developing domestic semiconductors has pros and cons. The advantages, such as avoiding geopolitical insecurities, are very apparent. But the risk of spurring overcapacity remains." Industry analyst Daniel Nenni says to expect a chip glut unless "there is some big boom in semiconductor demand."
Fortune, says, a shift has taken place and the world will soon be awash in chips. Lillian Li, vice president and senior credit officer at Moody’s, says, "All the world’s advanced economies, including the U.S., the EU, South Korea, and China have set out plans to advance capacity in the domestic semiconductor industry."
- By 2024, 5nm chips will be rolling out of TSMC's U.S. factory in Phoenix.
- The EU plans on committing $160B of COVID recovery funds in order to bring its share of the global semiconductor manufacturing industry to 30% from the current 20% by 2030.
- South Korea wants to spend $450 billion over the next decade to increase the capacity of its chip business.
- China's spending on semiconductor development rose 407% on an annual basis. The country has been trying to reduce its reliance on semiconductor imports. Additionally, Beijing would love to have more control over its ability to obtain semiconductors after U.S. bans made it more difficult to do so.
Moody's Li says that because China is the country most interesting in building its domestic chip supply, it also could find itself with a huge glut of semiconductors.
Li adds, "For China, developing domestic semiconductors has pros and cons. The advantages, such as avoiding geopolitical insecurities, are very apparent. But the risk of spurring overcapacity remains." Industry analyst Daniel Nenni says to expect a chip glut unless "there is some big boom in semiconductor demand."
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