KUALA LUMPUR (Jan 3): Global semiconductor capacity is expected to increase 6.4% in 2024 to top the 30 million wafers per month (wpm) mark for the first time after rising 5.5% to 29.6 wpm in 2023, according to US-based industry association Semi.

In its latest quarterly World Fab Forecast report released on Tuesday, Semi said growth in 2024 will be driven by capacity increases in leading-edge logic and foundry, applications including generative artificial intelligence and high-performance computing, and the recovery in end-demand for chips.

It said capacity expansion slowed in 2023 due to softening semiconductor market demand and the resulting inventory correction.

Semi president and chief executive officer Ajit Manocha said resurgent market demand and increased government incentives worldwide are powering an upsurge in fab investments in key chipmaking regions and the projected 6.4% rise in global capacity for 2024.

“The heightened global attention on the strategic importance of semiconductor manufacturing to national and economic security is a key catalyst of these trends,” he said.

Covering 2022 to 2024, the World Fab Forecast report shows that the global semiconductor industry plans to begin operations of 82 new volume fabs, including 11 projects in 2023 and 42 projects in 2024 spanning wafer sizes ranging from 300mm to 100mm.

Semi said China is expected to increase its share of global semiconductor production.

It said Chinese chip manufacturers are forecast to start operations of 18 projects in 2024, with 12% year-on-year (y-o-y) capacity growth to 7.6 million wpm in 2023, and 13% y-o-y capacity growth to 8.6 million wpm in 2024.

Taiwan is projected to remain the second-largest region in semiconductor capacity, increasing its capacity by 5.6% to 5.4 million wpm in 2023, and posting 4.2% growth to 5.7 million wpm in 2024.

The region is poised to begin operations of five fabs in 2024.

South Korea ranks third in chip capacity at 4.9 million wpm in 2023, and 5.1 million wpm in 2024, a 5.4% increase as one fab comes online.

Japan is expected to place fourth at 4.6 million wpm in 2023 and 4.7 million wpm in 2024, a capacity increase of 2%, as it starts operations of four fabs in 2024.

The World Fab Forecast shows the Americas increasing chip capacity by 6% y-o-y to 3.1 million wpm, with six new fabs in 2024.

Europe and the Middle East are projected to up their capacity by 3.6% to 2.7 million wpm in 2024, as they launch operations of four new fabs.

Southeast Asia is poised to increase its capacity by 4% to 1.7 million wpm in 2024, with the start of four new fab projects.

Meanwhile, Semi said foundry suppliers are forecast to rank as the top semiconductor equipment buyers, increasing their capacity to 9.3 million wpm in 2023, and a record 10.2 million wpm in 2024.

The memory segment slowed its expansion of capacity in 2023, due to weak demand for consumer electronics including PCs and smartphones.

The DRAM segment is expected to increase its capacity by 2% to 3.8 million wpm in 2023, and 5% to four million wpm in 2024. Installed capacity for 3D NAND is projected to remain flat at 3.6 million in 2023, and rise 2% to 3.7 million wpm in 2024.

In the discrete and analog segments, vehicle electrification remains the key driver of capacity expansion.

Discrete capacity is forecast to grow 10% to 4.1 million wpm in 2023, and 7% to 4.4 million wpm in 2024, while analog capacity is projected to grow 11% to 2.1 million wpm in 2023, and 10% to 2.4 million wpm in 2024.