KUALA LUMPUR (Sept 13): Global fab equipment spending on front-end facilities is expected to decline 15% year-on-year (y-o-y) to US$84 billion (RM392.53 billion) in 2023, from a record high of US$99.5 billion in 2022, before rebounding 15% y-o-y to US$97 billion in 2024, according to the US-based SEMI.
In a statement on Tuesday in conjunction with the release of its latest quarterly World Fab Forecast report, SEMI said softening chip demand and an elevated inventory of consumer and mobile devices will contribute to the decline in 2023.
SEMI said 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 and memory segments.
SEMI president and chief executive officer Ajit Manocha said the decline in equipment investment is proving shallower in 2023, and the rebound in 2024 will be stronger than expected earlier this year.
“The trend suggests the semiconductor industry is turning the corner on the downturn, and on a path back to robust growth, fuelled by healthy chip demand,” he said.
Foundry segment
SEMI said the foundry segment is expected to lead the semiconductor expansion in 2023, with US$49 billion in investments, 1% growth, and US$51.5 billion in spending in 2024, a 5% increase, as investment continues in leading-edge and mature process nodes.
Memory spending is forecast to stage a strong comeback in 2024, with a 65% increase to US$27 billion, after a 46% decline in 2023.
Specifically, DRAM investments are expected to decline 19% y-o-y to US$11 billion in 2023, but recover to US$15 billion, a 40% annual jump, in 2024. NAND spending is projected to mirror that trend, decreasing 67% to US$6 billion in 2023, but surging 113% to US$12.1 billion in 2024. MPU investments are expected to remain flat in 2023, and increase 16% to US$9 billion in 2024.
Taiwan to lead equipment spending
SEMI said Taiwan is expected to retain the global lead in fab equipment spending in 2024, with US$23 billion in investments, a 4% y-o-y increase. South Korea is projected to rank second in spending, with an estimated US$22 billion in investments in 2024, a 41% jump from this year reflecting a memory sector recovery.
With export controls expected to limit China’s spending in leading-edge technologies and foreign investment, the region is forecast to place third in equipment spending worldwide in 2024 at US$20 billion, a decline from 2023 levels.
Despite the constraints, Chinese foundry suppliers and IDMs are expected to continue investments in mature process nodes, said SEMI.
The report said 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% y-o-y increase.
The combined Europe and Middle Eastern region is also forecast to log record investments next year, increasing spending by 41.5% to US$8 billion.
Fab equipment spending is expected to increase to US$7 billion in Japan, and US$3 billion in Southeast Asia in 2024.