SEMI predicts a 22% decline in global Fab equipment spending in 2023, with a recovery expected in 2024

Recently, the Semiconductor Equipment and Materials International (SEMI), the industry association representing the global electronics product design and manufacturing supply chain, announced that it expects worldwide spending on wafer fab equipment for front-end facilities to decrease by 22% YoY from a historic high of $98 billion in 2022 to $76 billion in 2023 while projecting a recovery of 21% to $92 billion in 2024.

The decline in 2023 is attributed to weakened chip demand and increased inventory in the consumer and mobile device markets. The recovery in 2024 is driven by the end of inventory correction and strengthened demand for semiconductors in the high-performance computing (HPC) and automotive sectors. Ajit Manocha, President and CEO of SEMI, stated that for the first time this quarter, SEMI has made a projection for 2024, where global wafer fab capacity will steadily expand, and a range of emerging applications will drive growth in the future semiconductor industry.

The foundry business is expected to continue leading the expansion of the semiconductor industry. Following a 7.2% increase in capacity in 2022, capacity growth is expected to be 4.8% in 2023 and further increase by 5.6% in 2024. Investment in 2023 is expected to be $43.4 billion, a decrease of 12.1%, while investment in 2024 is expected to be $48.8 billion, an increase of 12.4%. Memory is the second-ranked area in terms of investment, with an expected investment of $17.1 billion in 2023, a decrease of 44.4%, and an increase to $28.2 billion in 2024.

Unlike other areas, analog and power ICs are expected to steadily expand, with spending expected to grow by 1.3% to $9.7 billion in 2023, mainly driven by stable growth in the automotive market, and investment in this area is expected to remain stable next year.