Fab equipment spending to breach $100B mark for the first time

Global spending on 300 mm fab equipment is expected to peak next year, according to Semi’s quarterly 300 mm Fab Outlook Report. This year’s spending level is relatively modest at 4 percent growth but set to increase by 24 percent in 2025 to surpass the 100-billion-dollar per year mark for the first time. The next two years will see 11 and 3 percent growth, respectively.

“The magnitude of the expected ramp of global 300 mm fab equipment spending in 2025 sets the stage for a record-setting three-year period of semiconductor manufacturing investments,” says Semi CEO Ajit Manocha. “The world’s ubiquitous need for chips is boosting spending on equipment for both leading-edge technologies addressing AI applications and mature technologies driven by automotive and IoT applications.”

China is projected to maintain its position as the top spending region until 2027, investing over 100 billion dollars in the next three years driven by its national self-sufficiency policies. However, spending is anticipated to gradually decrease from a peak of 45 billion dollars in 2024 to 31 billion by 2027.

Korea is projected to rank second and invest 81 billion dollars in the next three years to further its dominance in memory segments including DRAM, high-bandwidth memory (HBM) and 3D NAND flash. Taiwan is forecast to spend 75 billion dollars on 300 mm equipment over the next three years, ranking third as the region’s chipmakers build some new fabs overseas. Leading-edge logic is the primary driver of Taiwanese fab investments.

Foundry equipment spending is projected to reach approximately 230 billion dollars between 2025 and 2027, fueled by investments in sub-3nm cutting-edge nodes as well as continued spending on mature nodes. Investment in 2nm logic processes and development of key technologies at 2nm, such as gate-all-around (GAA) transistor structure and back-side power delivery technology, is crucial to meet future high-performance and energy-efficient computing needs, particularly for AI applications. Cost-effective 22nm and 28nm processes are expected to see growth due to increasing demand for automotive electronics and IoT applications.

The logic and micro segment is projected to spearhead the equipment spending expansion over the next three years, with an anticipated total investment of 173 billion dollars. Memory comes in second, expected to contribute over 120 billion dollars in spending during the same period, marking the beginning of another segment growth cycle. The power-related segment ranks third, with an expected investment of over 30 billion dollars over the next three years, including around 14 billion for compound semiconductor projects.