A chip manufacture machine Photo: VCG

Some Chinese chipmakers are rushing to buy foreign secondhand chip production equipment, as a global supply crunch and US sanctions created a supply-demand imbalance for China's semiconductor industry.

The secondhand equipment trading market is booming, Liang Yuhao, product engineer at Ningbo Chipex Semiconductor Co, told the Global Times on Sunday.

"We used to have 30 wafer probe stations, and this year we bought 20 more to expand production. Orders this year have doubled to more than 10,000 wafers per month compared with last year and we urgently need to expand our output," he said.

Most of the secondhand machines are imported from Japan, Liang said. Secondhand equipment is usually 30 percent cheaper than new equipment, he added.

The rush to purchase has driven prices up 20 percent on average, with core devices such as lithography equipment up more than 300 percent, according to media reports.

"Secondhand semiconductor equipment is now in hot demand, with a price increase of about 10 percent on our platform," Liao Jingqiang, a secondhand manufacturing equipment dealer based in South China's Guangdong Province, told the Global Times on Sunday.

The lithography equipment that he sells ranges in price from 3 million yuan ($461,000) to 7 million yuan, while etching machines cost 4 million yuan and up.

"We receive dozens of inquiries every day and there are not many left in stock," Liao said.

The chip shortage and US sanctions have left domestic chip firms in urgent need of expanding production. Tried-and-true secondhand devices, which are easier to set up and cheaper than new versions, have become the first choice for many small-scale chip plants, Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, told the Global Times on Sunday.

"Most of the secondhand semiconductor equipment in China is from Japan, where the market scale is relatively small," Xiang said.

China was the largest market for secondhand semiconductor equipment in the world in 2020. In 2020, China imported $13.7 billion worth of semiconductor equipment, up 30 percent from the previous year, according to a report from Semiconductor Equipment and Materials International last December.

China's imports of lithography equipment grew 97 percent in 2020, according to Bloomberg.