According to reports, the new ASML CEO Christoph Fouquet has published a ** on the future of the semiconductor industry. He said that 2024 will be a transition year from the bottom of the semiconductor adjustment cycle, and expects the semiconductor market to return to its previous growth trend after 2025. Fucay also revealed that ASML will increase the capacity of lithography machines in 2024, planning to deliver the first NAEUV lithography machine within the year and launch more advanced lithography machines in 2024. This move shows ASML's optimism about the chip semiconductor industry, believing that the market demand will gradually increase.
It is worth noting that after the new asmleco spoke, foreign media generally believed that SMIC was on the right track.
In recent years, the semiconductor market has been in a state of intense volatility. However, the new ASML CEO Christophe Fouquet has given a glimmer of hope. He believes that although the semiconductor industry is currently going through an adjustment cycle, 2024 will be an important turning point. With the advancement of technology and the growth of market demand, the semiconductor market is expected to regain its growth momentum by 2025. In order to adapt to future market developments, ASML has also adopted an aggressive strategy to increase lithography machine production capacity and plans to launch more advanced products. This move not only reflects ASML's confidence in the market, but also makes a positive prediction of the development situation of the industry.
Some foreign media pointed out that SMIC has shown a good development trend in the current market environment, and put forward the following three reasons.
1.Bet on mature processes: Unlike other chip giants, SMIC has chosen to bet on mature processes when expanding production. While TSMC, Intel and other manufacturers are betting on advanced processes, SMIC has chosen to expand chip production capacity such as mature processes and remain relatively stable in terms of capital expenditure. This strategy has had a positive effect. SMIC has benefited from the rapid development of the new energy vehicle market, and the demand for mature process chips has increased significantly. As the world's largest producer and seller of new energy vehicles, the Chinese market has become SMIC's most important order**. Moreover, with the decrease in domestic demand for imported chips and the increase in demand for domestic chips, domestic foundry companies such as SMIC have undertaken more and more electronic chip foundry business.
In the current fierce competition in the global semiconductor market, SMIC has successfully achieved rapid business expansion in a unique way. On the one hand, SMIC has actively seized the huge opportunities in the mature process chip market. While other chip giants are betting on advanced processes, SMIC has chosen to bet on mature processes and has adopted a relatively prudent capital expenditure strategy when expanding chip production capacity. This strategic decision is in line with market demand, which has enabled SMIC to gain tremendous business opportunities in the new energy vehicle industry. As the world's largest market for the production and sales of new energy vehicles, China's demand for mature process chips has shown a blowout growth. SMIC's keen understanding of this trend has led to a continuous increase in its order book, 75% of which come from domestic manufacturers. Moreover, SMIC has further strengthened its position in the domestic market through cooperation with giants such as TSMC, while competitors such as TSMC have lagged behind in the pace of expansion.
2.Continued Capacity Expansion: SMIC has recently invested heavily in the expansion of its fab, and expects to complete the wafer expansion in the near future. According to the news released by SMIC, the company has increased the monthly production of various chips, which is expected to reach 100 million by the end of the year. At the same time, SMIC has also strengthened cooperation with ASML and other international manufacturers, and has continuously introduced lithography machines and other equipment. According to the data, ASML has shipped more than 5 billion euros worth of equipment to the Chinese market in the past two quarters, and the Chinese market has also become a major contributor to ASML's revenue, accounting for more than 46%. This shows that domestic manufacturers such as SMIC have shown a more positive attitude in continuing to expand chip production capacity.
In order to meet the growth of market demand, SMIC has recently expanded its production capacity significantly. By investing more than 150 billion yuan in factory expansion, SMIC has achieved impressive results. According to official information, SMIC has basically completed the wafer expansion work, and is expected to achieve an output of more than 100 million chips of various types per month by the end of the year. In addition, SMIC has also strengthened cooperation with international manufacturers and introduced a large number of advanced equipment. According to the data, ASML shipped more than 5 billion euros worth of equipment to the Chinese market in the past two quarters, and the Chinese market has become the largest contributor to ASML's revenue**, accounting for more than 46%. This shows that SMIC has good competitiveness and market share in expanding chip production capacity.
3.Accelerating local chip production: In the face of policy changes and external pressures, SMIC has stepped up the localization of its chip production lines. Earlier, SMIC had made it clear that the risk of the 28nm mature process continued to decrease. With the launch of products such as Huawei Mate60Pro and the restrictions on the export of chip semiconductor products by the United States, domestic companies such as SMIC are actively promoting the localization process of chips, thereby reducing their dependence on imported chips. At the same time, SMIC has continuously strengthened its cooperation with the domestic industrial chain and made a series of major breakthroughs. According to sources, SMIC and domestic companies have the ability to build DUVI lithography machines, which can reduce the chip manufacturing process to 7nm. This breakthrough means that SMIC will soon achieve the full process of non-US 7nm. It is worth mentioning that SMIC has successfully completed the 7nm R&D task three years ago, and independently developed N1, N2 and other processes, similar to TSMC's 7nm process, and achieved mass production. Currently, SMIC is developing the 5nm process and plans to start the research and development work in full force after the arrival of the EUV lithography machine. ASML, on the other hand, offers successor models such as the 2000i, a lithography machine that can reduce the chip manufacturing process to 5nm.
In the face of the turbulence of the global semiconductor market, SMIC dared to face challenges and actively responded to policy changes and external pressures. The policy adjustment has also had a certain impact on SMIC's strategy. SMIC has stepped up the localization of its chip production lines, reducing its dependence on imported chips by accelerating the production of local chips. SMIC's cooperation with the domestic industry chain has also made a series of breakthroughs, jointly realizing the research and development of DUVI lithography machine, which can reduce the chip manufacturing process to 7nm, and soon realize the whole process of non-US 7nm. In addition, SMIC is continuing to advance the research and development of the 5nm process, and plans to fully launch the relevant work after the arrival of the EUV lithography machine. At the same time, ASML also offers products such as the 2000i, a lithography machine that reduces the chip manufacturing process to 5nm.
In summary, SMIC has successfully seized the market opportunity by betting on mature processes, continuing to expand production capacity, and accelerating local chip production. Its cooperative relationship with domestic manufacturers has been strengthened, and it has also been recognized by international manufacturers such as ASML. As a leading company in the field of lithography machines, ASML's large-scale shipment to the Chinese market also confirms the development potential and market position of domestic manufacturers such as SMIC. Against the backdrop of intensifying competition in the semiconductor industry, SMIC's successful strategy and development prospects have attracted much attention.