The changes in trade data for semiconductor manufacturing equipment between China and Japan reflect the strong demand of the Chinese market for such products. The Japanese Ministry of Finance announced that last month, the country's semiconductor equipment exports to China surged by 61.6%, reaching 179.9 billion yen (1.6815 trillion won, approximately $1.29 billion). Despite the United States' imposition of sanctions to curb technological progress, the significant increase in export volume highlights the persistent growth in China's demand for advanced semiconductor manufacturing equipment. Last month, the total weight of equipment exported by Japan to China was 6,742 tons, a 41% increase compared to the previous month. Mechanical equipment accounted for 23.2% of Japan's total exports to China, with semiconductor equipment comprising 11.9%. This surge underscores Japan's pivotal role in the global semiconductor supply chain, providing indispensable technology and materials for semiconductor manufacturing. Concurrently, ASML, the leading Dutch supplier of photolithography machines, also experienced an increase in exports to China. In the second quarter of this year, ASML's exports to China grew by 21% quarter-on-quarter, reaching 2.3 billion euros (3.47 trillion won). ASML's advanced photolithography equipment, especially extreme ultraviolet (EUV) lithography machines, is crucial for the production of semiconductors smaller than 7 nanometers. The U.S. Department of the Treasury held an "Economic Working Group" meeting from the 19th to the 20th, which raised concerns about potential disruptions to the global semiconductor supply chain. This move could have significant impacts on global enterprises, including South Korean giants like Samsung Electronics, which may face disruptions in semiconductor production.
In the first quarter of 2024, the export value of semiconductor manufacturing equipment, its components, and flat panel display manufacturing equipment from Japan, with China as the destination, accounted for more than 50% of the total for three consecutive months, a status that has been maintained since the third quarter of 2023. Japanese trade data shows that in the first quarter ending in March of this year, the Chinese market accounted for half of its semiconductor manufacturing equipment, equipment components, and flat panel display equipment export volume. In terms of actual amounts, Japan's export value of related equipment to China in the first quarter of 2024 reached 521.2 billion yen, an 82% increase compared to the same period in 2023. Japanese media pointed out that this amount is the highest level since 2007, when comparable data became available. According to data from the General Administration of Customs of China, China's imports of Japanese semiconductor manufacturing equipment (products with customs commodity eight-digit codes starting with 8486 and some starting with 9031) are continuously increasing. The data shows that from January to April of this year, the total amount of these products imported from Japan was 4.443 billion yuan, 4.173 billion yuan, 6.814 billion yuan, and 6.269 billion yuan, respectively, with year-on-year growth rates of 53.06%, 7.45%, 56.82%, and 42.19%, respectively, maintaining a relatively high growth rate.
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Analysts believe that the changes in trade data for semiconductor manufacturing equipment between China and Japan reflect the strong demand of the Chinese market for such products. On one hand, against the backdrop of previous Sino-American trade frictions, China has generated a special need to replace production lines, with an increase in inquiries centered around general products. On the other hand, with the emergence of new products such as new energy vehicles, the Chinese market's demand for automotive electronic components and third-generation semiconductor products is growing day by day.
Currently, the main Japanese companies producing semiconductor manufacturing equipment are Nikon and Canon. In the photolithography machine field, the aforementioned two companies and ASML, headquartered in the Netherlands, form a "tripod" situation. According to the latest statistical data from SEMI (International Semiconductor Industry Association), in 2022, photolithography machines accounted for 23% of the global semiconductor equipment market share, with a market size of $23.23 billion. Among them, ASML, Canon, and Nikon photolithography machine market shares are 82%, 10%, and 8%, respectively. In addition to photolithography machines, Nikon also holds a leading position in the global market for other semiconductor manufacturing equipment such as photolithography inspection and measurement.
The latest data released by the International Semiconductor Industry Association (SEMI) shows that due to the significant decline in the Taiwan region of China and the North American market, global semiconductor equipment sales in the first quarter of 2024 shrank by 2% year-on-year to $26.4 billion. However, at the same time, China's semiconductor equipment sales in the first quarter reached $12.52 billion, a 113% increase compared to the same period last year, maintaining its position as the world's largest chip equipment market for four consecutive quarters.
The global chip market entered a downturn in the second half of 2022, and the market is currently experiencing a bottoming-out and rebounding process. With the new energy vehicle industry in China beginning to show increasingly strong industrial chain integration capabilities, a number of car companies have begun to invest in or establish their own semiconductor factories, which has also become one of the important forces driving the recovery of the semiconductor market after the pandemic.
According to industry sources, Nikon is currently supplying photolithography equipment to BYD. "At present, it appears that the rapid development of China's new energy vehicle industry has stimulated the demand for 28nm process chips, as we have received orders from some new energy vehicle companies for photolithography machine products covering this process," said Masuhiro Morita, General Manager of Nikon's Semiconductor Equipment Business Division, to the First Financial Daily reporter.In terms of products, Nikon has planned to focus on launching two photolithography machine products for the Chinese market in 2024, one of which is specifically designed for silicon carbide materials. Similar photolithography machine products targeting silicon carbide can also be found in the product catalog of its competitor, Canon. Morita stated that the increased demand for chips in China's new energy automotive industry and the advancement of semiconductor equipment manufacturing technology represent a virtuous cycle of mutual encouragement and growth. Therefore, as an international semiconductor manufacturing equipment producer, they are pleased to see such trends.
