Investment in semiconductor fab equipment is set to grow 9 percent to a new global high of $99 billion by the end of 2022 as the industry continues to boost capacity despite the worsening global economic outlook.
These figures come from the latest quarterly World Fab Forecast report published by SEMI, the industry association for the electronics manufacturing and supply chain. It claims the semiconductor equipment industry has increased capacity this year and will do so again in 2023.
“After achieving a record level in 2022, the global fab equipment market is projected to remain healthy next year driven by new fabs and upgrade activity,” SEMI president and CEO Ajit Manocha said in a statement.
Dutch company ASML, which develops lithography equipment for semiconductor manufacturers, reported a record $8.7 billion in orders for the second quarter of this year, and said it was seeing “extraordinary demand for its chipmaking machines.”
However, in its previous quarterly report issued in June, SEMI was predicting that spending on fab equipment by chipmakers was going to hit $109 billion by the end of this year, so the enthusiasm for increasing capacity has already cooled somewhat.
Earlier this month, we reported slowing demand for some technology products, and some analysts were saying that the semiconductor industry is heading into “the deepest downcycle and inventory correction in over a decade.”
According to SEMI, global semiconductor capacity has already increased 8 percent this year following a 7.4 percent rise in 2021. It says the fab equipment industry last experienced a year-on-year growth rate of this size in 2010, when it surpassed 16 million wafers per month. In contrast, SEMI projects the industry will reach 29 million wafers per month in 2023, with capacity increasing 5.3 percent year-on-year.
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SEMI also says the foundry sector represented the bulk (53 percent) of semiconductor equipment spending for 2022 and will continue to do so in 2023, followed by memory manufacturing at 32 percent in 2022 and a projected 33 percent in 2023. These two sectors also account for the largest capacity increases.
Going by region, SEMI says that Taiwan is unsurprisingly in the lead when it comes to fab equipment investment this year, increasing spending by 47 percent from last year to $30 billion.
This fits with figures earlier this year from TrendForce showing Taiwan dominates the world’s semiconductor manufacturing industry, controlling 48 percent of the foundry market and 61 percent of the world’s capacity to build at 16nm processes or newer, and this is likely to continue for the foreseeable future.
Still in Asia, Korea’s investment in new fab equipment has declined by 5.5 percent to $22.2 billion, and China is down 11.7 percent from its peak last year to $22 billion.
According to SEMI, the Europe/Middle East region is set to show record high spending of $6.6 billion, a 141 percent increase over last year, although the overall outlays are still lower than in other regions. Strong demand for high performance computing and advanced technologies is driving this, SEMI said.
The Americas and Southeast Asia are also expected to register record high investments in 2023, according to SEMI. ®
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