SEMI forecasts South Korea will increase its spending on advanced chipmaking equipment by 41.5% YoY to $21B in 2024, versus China's 2% YoY increase to $16.6B
Context & Ripple Effects
This SEMI forecast lands mid-way through an arc that started with Seoul's $450B plan to build the world's biggest chipmaking base over a decade — the 41.5% jump to $21B is that policy converting into actual tool orders. A week later SEMI put Japan on its own steep trajectory, with spending up 82% to $7B, showing the Korea surge is part of a broader allied-Asia capex wave rather than a one-country event.
First-order effects
- South Korea displaces China as the largest named buyer in this advanced-equipment comparison ($21B vs $16.6B), shifting tool vendors' near-term revenue mix toward Korean fabs.
- China's flat 2% growth marks the point where export controls visibly bite its advanced-tool purchasing, pushing capacity plans toward workarounds instead of outright buys.
Second-order effects
- With top-end imports constrained, China leans on retrofitting older ASML DUV lithography systems and an undocumented rule requiring at least 50% domestically made equipment on new capacity — redirecting spend toward local toolmakers and away from Western vendors.
- Seoul doubles down rather than coasting: the capex boom is later reinforced by a $10.2B state support package for domestic chipmakers, and SEMI's follow-up projection has Korea committing $81B across 2025–2027, second only to China's $100B+.
Third-order effects
- The global equipment market is splitting into two tracks — an export-controlled China building around retrofits and domestic tools, and an allied Korea-Japan-Taiwan axis scaling subsidized capacity — making government support a structural input to fab economics rather than crisis response.
The trend: Chipmaking capex is regionalizing into state-backed blocs, with Korea and Japan accelerating allied buildouts as China pivots to self-sufficiency under export controls.