Fab Equipment Spending to Rebound in 2024, says SEMI

After an inventory correction in 2023, the report says semiconductor demand will be driven by two main industry segments.

World Fab Forecast Report third quarter 2023 update. (Image: SEMI)

World Fab Forecast Report third quarter 2023 update. (Image: SEMI)

Global fab equipment spending for front-end facilities in 2023 is expected to decline 15 percent year-over-year (YoY) to US$84 billion from a record high of US$99.5 billion in 2022 before rebounding 15 percent YoY to US$97 billion in 2024, SEMI announced in its quarterly World Fab Forecast report.

SEMI, the industry association for the electronics manufacturing and design industry, say softening chip demand and elevated inventory of consumer and mobile devices will contribute to the 2023 decline.

Next year’s fab equipment spending recovery will be partly driven by the end of the semiconductor inventory correction in 2023 and strengthening demand for semiconductors in the high-performance computing (HPC) and memory segments.

“The 2023 decline in equipment investment is proving shallower and the 2024 rebound stronger than expected earlier this year,” said Ajit Manocha, SEMI president and CEO. “The trend suggests the semiconductor industry is turning the corner on the downturn and on a path back to robust growth fueled by healthy chip demand.”

Foundry Segment Taking the Lead

The foundry segment is expected to lead the semiconductor expansion in 2023 with US$49 billion in investments, a one percent uptick in growth, and US$51.5 billion in spending in 2024, a five percent increase as investment continues in leading-edge and mature process nodes.

·         Memory spending in 2024 is forecast to climb 65 percent to US$27 billion after a 46 percent decline in 2023.

·         DRAM investments are expected to decline 19 percent YoY to US$11 billion in 2023 but recover to US$15 billion, a 40 percent annual jump, in 2024.

·         NAND spending is projected to mirror that trend, decreasing 67 percent to US$6 billion in 2023 but surging 113 percent to US$12.1 billion in 2024.

·         MPU investments are expected to remain flat in 2023 and increase 16 percent to US$9 billion in 2024.

Taiwan to Lead Equipment Spending

Taiwan is expected to retain the global lead in fab equipment spending in 2024 with US$23 billion in investments, a four percent YoY increase. Korea should rank second in spending, with an estimated US$22 billion in investments in 2024, a 41 percent jump from this year reflecting a memory sector recovery.

Export controls should limit China’s spending and foreign investment, pushing the region to place third in equipment spending worldwide in 2024 at US$20 billion, a decline from 2023 levels—Chinese foundry suppliers and IDMs are expected to continue investments in mature process nodes.

The Americas is expected to remain the fourth largest region in spending, reaching a historic high of US$14 billion in investments in 2024, a 23 percent YoY increase. The Europe and Mideast region is also forecast to log record investments next year, increasing spending by 41.5 percent to US$8 billion. Fab equipment spending in Japan and Southeast Asia is expected to increase to US$7 billion and US$3 billion, respectively, in 2024.

Covering 2022 to 2024, the SEMI World Fab Forecast report shows the global semiconductor industry increasing capacity by five percent this year after an eight percent rise in 2022. Capacity growth is expected to continue in 2024, climbing six percent.

The latest update of the SEMI World Fab Forecast report lists 1,477 facilities and lines globally, including 169 facilities and lines with various probabilities expected to start operation in 2023 or later.

Visit the SEMI website to download a sample of the SEMI World Fab Forecast report or purchase a copy of the report.

Written by

Michael Ouellette

Michael Ouellette is a senior editor at engineering.com covering digital transformation, artificial intelligence, advanced manufacturing and automation.