Global fab equipment spending to see strong recovery in 2024 after a weak 2023

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Global fab equipment spending for front-end facilities is expected to fall by 22% to $76 billion in 2023 after seeing a record high of $98 billion in 2022.

Despite a significant slowdown this year spending is then expected to rise by 21% to reach $92 billion in 2024, according to new figures released by SEMI in its latest quarterly World Fab Forecast report.

The 2023 decline is being attributed to weakening chip demand and higher inventory of consumer and mobile devices.

Next year’s fab equipment spending recovery will be driven in part by the end of the semiconductor inventory correction in 2023 and strengthening demand for semiconductors in the high-performance computing (HPC) and automotive segments.

“This quarter’s SEMI World Fab Forecast update offers our first look ahead to 2024, highlighting the steady global expansion of fab capacity to support future semiconductor industry growth driven by the automotive and computing segments and a host of emerging applications,” said Ajit Manocha, SEMI president and CEO. “The report points to a healthy 21% uptick in equipment investment next year.”

The reports says that Taiwan is expected to retain the global lead in fab equipment spending in 2024 with $24.9 billion in investments, a 4.2% YoY increase, followed by Korea at $21 billion, a YoY 41.5% jump. While China is forecast to place third in equipment spending worldwide in 2024, US export controls are expected to limit the region’s spending to $16 billion, comparable to the region’s investments in 2023.

The Americas is expected to remain the fourth largest region in spending with a record $11 billion in investments in 2024, representing a 23.9% YoY increase. Europe & Mideast is also forecast to log record investments next year, increasing spending by 36% to $8.2 billion. Fab equipment spending in Japan and Southeast Asia is expected to increase to $7.0 billion and $3.0 billion, respectively, in 2024.

Covering 2022 to 2024, the SEMI World Fab Forecast report shows the global semiconductor industry increasing capacity by 4.8% this year after a 7.2% rise in 2022. Capacity growth is expected to continue in 2024, rising 5.6%.

With more suppliers providing foundry services to increase global capacity, the foundry segment is expected to lead the semiconductor expansion in 2023 with $43.4 billion in investments, a 12.1% YoY decline, and $48.8 billion, a 12.4% increase, in 2024.