Author: Zihao Currently, the R&D costs, tape-out expenses, and equipment investments for advanced process nodes are climbing year by year, while the performance gains brought by technological iteration are gradually narrowing, and the commercial cost-effectiveness continues to decline. In contrast, a large number of rigid-demand chips on the market—such as automotive power devices, industrial control chips, analog signal chips, IoT MCUs, and sensor chips—are mostly produced using mature process nodes from 90nm to 28nm, supporting trillion-dollar end markets including consumer electronics, new energy, industrial control, and automotive electronics.
Within the capacity system of mature process nodes, used semiconductor equipment, long underestimated, is shifting from an 'edge backup' to the 'core of the industry.' It is no longer a low-cost choice for temporary emergency relief during industry boom cycles, but a key asset for global wafer fabs to expand capacity, reduce costs, smooth cycle fluctuations, and hedge against supply chain risks at this stage. Data shows that in 2024, the global market size for used semiconductor equipment exceeded 26 billion RMB, and is expected to approach 66.5 billion RMB by 2031, with a six-year compound annual growth rate steadily maintaining at 14.4%. In the context of continuous turmoil in the semiconductor industry, this low-key niche track has maintained a steady and solid growth pace for many years, proving that its industrial value is also gradually increasing.
01 Used Equipment Shifts from 'Capacity Spillover' to 'Rigid-Demand Supplementation'
For a long time, the industry's positioning of used equipment has been highly rigid. In past industrial cognition, used equipment was simply the surplus equipment after process upgrades by top-tier giants, and a helpless choice for small and medium-sized wafer fabs to compress costs and produce low-end capacity, always in a subordinate position in the industrial chain. Over the past few decades, the global semiconductor industry has followed a very clear logic of gradient transfer: advanced process nodes iterate upwards, old equipment spills over downwards, high-end manufacturers sprint for technological heights, and small and medium-sized manufacturers take over existing capacity. However, in the last three to four years, this traditional rule that has operated for many years has been broken by actual supply and demand.
From the supply side, the traditional source pool of global used equipment has continued to shrink. Semiconductor equipment belongs to ultra-long-cycle industrial assets. The design service life of core equipment such as etching, thin film, and ion implantation is generally 15 to 20 years, far exceeding the 3 to 5-year iteration cycle of chip process nodes. This also means that a large amount of equipment eliminated by top-tier manufacturers still has intact hardware life and process capabilities, fully meeting the conditions for continued mass production. In the past, when companies like TSMC (Taiwan Semiconductor Manufacturing Company), Samsung, and Intel updated their advanced processes, they would shut down old 8-inch and 12-inch production lines in batches. A large amount of equipment flowed into the global trade market, constituting the most stable source base for the global used equipment industry.
Today, the logic of supply sources has changed. Given the explosion of the global NEV (New Energy Vehicle), photovoltaic energy storage, and industrial automation industries, mature process products such as power semiconductors, high-voltage analog chips, PMICs (Power Management ICs), and sensors continue to be in short supply. The capacity strategies of leading memory giants and wafer foundries have comprehensively shifted to 'revitalizing existing stock and prioritizing internal use.' Samsung, SK Hynix and other once-largest suppliers of used equipment have basically stopped selling off retired equipment in batches at this stage. All iterated old equipment is prioritized for internal special process transformation, niche capacity expansion, and maintenance replacement of old production lines. The supply sources originally flowing into the global open market have significantly decreased, high-quality equipment available for circulation overseas has become increasingly scarce year by year, and the market supply side has entered a long-term tight state.
From the demand side, the delivery bottleneck of brand-new equipment has further pushed up the market value of used equipment. Currently, the overall capacity of the global semiconductor equipment industry chain is tight. The delivery cycles for core equipment such as etchers, PVD, CVD, and ion implanters have generally been extended to 12 to 18 months, and some special process equipment even requires more than two years. For the wafer manufacturing industry, a delivery window as long as a year and a half is enough to miss an entire round of market trends, and will also directly disrupt the enterprise's capacity planning, customer delivery, and order layout.
Meanwhile, the downstream market's demand for mature process chips has always maintained high-level operation. The upgrade of automotive electronics has driven a surge in demand for high-voltage power chips and automotive-grade analog chips. The intelligent transformation of industry has steadily pulled up the demand for industrial control chips and memory chips. IoT, smart homes, and edge devices continue to consume a large number of mid-to-low-end computing and control chips. Global mainstream 8-inch and 12-inch mature production lines have been running at full capacity all year round, and many sub-categories have long been in a state of short supply. Manufacturers have a strong willingness to expand capacity, but the delivery shortcomings of brand-new equipment make it difficult for new capacity to land quickly.
Especially for a large number of domestic small and medium-sized wafer fabs, special process manufacturers, and IDM startups, brand-new equipment is not only expensive in unit price and puts huge pressure on fixed asset investment, but the long delivery cycle is even more fatal. The rhythm of enterprise project initiation for capacity expansion, capacity landing, and order delivery is completely constrained by equipment delivery times. In contrast, used equipment that has undergone deep refurbishment, precision calibration, and operating condition verification has the greatest advantages of being 'fast, cost-effective, and stable.' The delivery cycle can be compressed to the level of several months, the procurement cost is significantly reduced compared to new machines, and the process has been verified by years of mass production. Its stability, adaptability, and maturity have been tested by the market, avoiding the debugging risks of new process equipment.
With the superposition of multiple factors, the industry's original gradient pattern of 'advanced iteration, backward spillover' is gradually weakening. Used equipment is no longer synonymous with low-end capacity, nor is it icing on the cake during industry upswings. Instead, it is the core support for the expansion of mature process nodes at this stage, the smooth landing of small and medium-sized fabs, and the volume increase in the special process track, completing the transformation from passive surplus circulation to active rigid-demand supplementation.
02 Deep Contradictions Between Standardized Rigid Demand and Unregulated Markets
After decades of global circulation, used semiconductor equipment has built a complete industry chain covering the globe. From the elimination of production lines by overseas giants, disassembly and packaging, cross-border customs declaration and transportation, to the disassembly, cleaning, parts replacement, precision debugging, and whole machine retesting by domestic refurbishment factories, and finally to the installation and mass production in terminal wafer fabs and later operation and maintenance spare parts, the entire chain has clear division of labor, active trade, and huge circulation volume. Europe, the US, Japan, and South Korea control upstream core sources, while mainland China, Chinese Taiwan, and Southeast Asian enterprises undertake the functions of refurbishment processing and market circulation, with the final equipment serving special production lines, R&D laboratories, and small and medium-sized wafer fabs around the world.
The seemingly mature industrial system actually hides very sharp structural contradictions: chip manufacturing is one of the industries with the highest degree of standardization, the most stringent precision requirements, and the lowest fault tolerance in the global industrial system, but the used equipment circulation market has long been in an unstandardized state of free growth, lack of standards, and weak regulation. The extremely rigorous manufacturing rigid demand meets the loose and chaotic circulation market, creating the industry's 'polarized tearing' pattern for many years.
Currently, leading regular service providers in the market have formed a refurbishment system close to the original factory level. These enterprises possess professional clean refurbishment workshops, precision testing instruments, and mature technical teams, with the entire refurbishment process fully benchmarked against original factory standards. After the equipment enters the factory, it undergoes complete disassembly, deep cleaning of the chamber, full replacement of aged consumables, precision electrical and mechanical accuracy calibration, high and low-temperature cycle testing, and mass production operating condition simulation verification. Every parameter is strictly benchmarked against new machine standards. After the entire process of refurbishment, the process consistency, operational stability, and mass production yield can be fully guaranteed. The comprehensive performance can reach over 95% of new machines, while the procurement and refurbishment costs are only 50% to 60% of brand-new equipment. The outstanding cost-effectiveness advantage has also made it an important choice for many leading second-tier wafer fabs to expand backup capacity and layout special processes.
However, at the other end of the market, the extensive operation models of a large number of small and medium-sized traders and small refurbishment workshops continue to lower the overall quality baseline and market reputation of the industry. Most small teams lack clean operation environments, professional testing equipment, and mature technical personnel. The so-called refurbishment only stays at the level of appearance dust removal and simple cleaning, without replacing the core consumables and worn parts that age under long-term high-temperature and high-vacuum operating conditions, without calibrating key process parameters, and without conducting whole machine performance testing. Moreover, some practitioners, in order to compete for the low-price market and earn high price differences, deliberately conceal hidden problems such as chamber wear, circuit aging, and vacuum leaks, tamper with equipment running hours, and falsely report process accuracy, seriously disrupting market order.
More critically, the used semiconductor equipment industry still lacks unified industry standards, grading systems, testing specifications, and quality assurance systems, nor does it have a credible third-party quality inspection institution. It is difficult for ordinary wafer fab procurement teams to simply judge the real operating condition of the equipment through appearance and parameter labels. Hidden problems such as chamber wear, circuit aging, and precision deviation are difficult to identify. Procurement decisions mostly rely on professional experience and merchant reputation, resulting in extremely high overall trial-and-error costs and uncontrollable risks.
This status quo directly causes the typical phenomenon of bad money driving out good money in the industry. Regular refurbishment, due to multiple processes, high costs, and relatively higher quotations, does not have an advantage in price competition; while low-priced and poor-quality refurbished equipment quickly seizes the sinking market relying on price advantages, leading to a chaotic industry price system and uneven equipment quality. On one side is the extreme precision requirement of micrometer and nanometer levels in chip manufacturing, and on the other side is the arbitrary, non-standardized, and unstandardized operations in the used circulation market. This industrial mismatch has long restricted the high-quality development of the industry and prevented the huge industrial value of used equipment from being fully released.
03 Used Equipment Becomes a New Battlefield for Supply Chain Security Game
Supply and demand mismatch and industry non-standard chaos are long-standing internal structural problems in the used equipment track, while the continuously escalating global control policies in recent years have rewritten the underlying operational logic of the industry from the outside. What used to be a purely market-oriented trade category has now been upgraded to a key link in the global semiconductor supply chain game, with its strategic value and industrial weight continuing to increase.
For a long time in the past, the focus of global semiconductor export controls was highly concentrated. National regulations mainly targeted cutting-edge fields such as brand-new high-end equipment, advanced process technologies, high-end chip IP, and cutting-edge materials. For retired equipment, refurbished equipment, general spare parts, and routine calibration and operation and maintenance services, a basically loose and free circulation environment was maintained. This loose system was an important buffer for the dynamic balance of global capacity, regional capacity complementarity, and supply chain self-regulation, allowing global mature process capacity to be flexibly allocated and efficiently utilized.
In the past two years, global semiconductor regulatory rules have comprehensively tightened, and many countries have intensively updated control lists, achieving full-chain and full-process control of used equipment. From the export of retired equipment, cross-border circulation, and refurbishment transformation, to core spare parts trade, original factory calibration and maintenance, and firmware iteration and upgrades, all links have been included in the scope of compliance review. The originally freely circulated cross-border equipment trade, spare parts allocation, and transnational technical services now require layer-by-layer approval, with cumbersome processes, extended cycles, and significantly increased uncertainty. The global used equipment free circulation system that has operated for decades is gradually weakening.
The most realistic and intuitive industrial problem brought by the tightening of controls is that a large number of old equipment in service globally has fallen into the 'three-no maintenance dilemma': no original factory spare parts supply, no original factory precision calibration, and no official firmware updates. A large number of mature production line equipment have long service lives and highly depend on original factory consumables, accessories, program firmware, and process calibration services. After the upgrade of controls, overseas original factory technical services and spare parts supply have basically been interrupted.
To ensure that production lines do not stop and capacity is not interrupted, global wafer fabs and the refurbishment industry generally adopt the emergency mode of disassembling and reusing parts, extracting available spare parts by disassembling idle equipment of the same model to replace the aged and worn parts of the equipment in use. Although this emergency measure can extend life in the short term and maintain basic capacity operation, it has obvious shortcomings. Non-original factory spare parts have insufficient adaptability and limited compatibility. Lacking the support of original factory process calibration and firmware optimization, the equipment process precision is prone to deviation, and batch production consistency decreases. Long-term operation will gradually drag down the production line yield, bringing continuous and systematic quality risks to global mature process capacity.
Along with the reconstruction of rules, the core competition logic of the industry has also iterated. In the past, when enterprises purchased used equipment, the core considerations were only price, delivery speed, and basic performance. Today, enterprise selection pays more attention to whether the equipment inventory reserve capacity, localized refurbishment technology accumulation, core spare parts alternative independent R&D capability, and localized operation and maintenance service system are perfect. The focus of industry development has comprehensively tilted towards localized layout, autonomous technology, and controllable circulation. The ability to revitalize existing equipment, local refurbishment processes, and spare parts alternative technologies have become the core moats for used equipment enterprises.
As the global semiconductor industry shifts from a single technological race to a new stage where multiple goals such as technological iteration, supply and demand balance, and supply chain security run in parallel, the stereotyped label of used equipment is fading. In the future, this long-term low-key invisible track will continue to release huge industrial dividends.