Semiconductor capital expenditure will grow rapidly from 2024

Yahoo! News

June 16, 2023

Author Zhang Jiarui

The International Semiconductor Industry Association (SEMI) pointed out in the latest "12-inch Fab to 2026 Outlook Report" that based on the strong market of high-performance computing (HPC), automotive electronics, and the increase in demand for memory, the equipment capital expenditure from 2024 to 2026 will have a "double-digit" high growth rate. In the future, the semiconductor industry will gradually start 53 operating facilities. Foundry and memory will play a key role, and the demand for chips in a wide range of end markets and applications is in the ascendant.

SEMI Global Marketing Director and President of Taiwan, Cao Shilun, said that it is estimated that there will be a wave of growth in 12-inch fab equipment spending, which shows that the market's long-term demand for semiconductors has always been strong. Although it is estimated that global 12-inch fab equipment spending will drop by 18% to US$74 billion this year, it will rebound by 12% next year to US$82 billion, and will continue to grow by 24% to US$101.9 billion in 2025, reaching US$118.8 billion in 2026. In other words, in the next three years, the annual equipment capital expenditure is expected to reach a double-digit high growth rate.

Cao Shilun pointed out that wafer foundry and memory are important growth engines, and wafer foundry equipment spending leads all fields, reaching US$62.1 billion in 2026, higher than this year's US$44.6 billion. Followed by $42.9 billion of memory, an increase of 170% in three years. Analog (analog) and logic (logic) both show a growing trend. It is expected that 53 operating facilities will start up in the next four years.

However, equipment investment in microprocessor/microcontroller (microprocessor/microcontroller), discrete (mainly power components) and optical (optoelectronics) components declined compared to this year.

The output value of the global semiconductor supply chain is about 959 billion yuan, including eight major industries including fabless (IC design), IDM, foundry, IC packaging and testing, materials, EDA, and IP (silicon intellectual property). Among them, the top three regions are the United States accounting for about 39%, Taiwan 18%, and South Korea 13%.

SEMI estimates that South Korea’s 12-inch fab equipment expenditure is expected to reach US$30.2 billion in 2026, doubling the growth from 2023. Taiwan is also expected to invest US$23.8 billion, and equipment expenditures in China and the United States will also continue to grow.

Governments of various countries have also stepped up subsidies. For example, the "Chip and Science Act" of the United States provides 52.7 billion U.S. dollars (about 1.6 trillion Taiwan dollars) in semiconductor manufacturing subsidies. The European Union's "EU Chip Act" is expected to subsidize semiconductor manufacturing. 43 billion euros (about 1.4 trillion Taiwan dollars). In order to alleviate the impact of supply chain disconnection and geopolitics, and at the same time strengthen the resilience of the supply chain, these measures have allowed the semiconductor industry to show rapid growth in the amount of capital expenditure in the future.