This was driven by sustained investments in advanced logic, high-bandwidth memory (HBM), and advanced packaging technologies that support AI applications.
According to SEMI memory-related CapEx surged 57% year-over-year, while spending on non-memory segments increased by 15% over the same period.
The report also indicated that spending on wafer fab equipment (WFE) grew 19% year-over-year in Q1 2025 and is expected to increase another 12% in Q2, driven by robust investments in advanced logic and memory production to meet growing AI demand.
Test equipment billings jumped 56% year-over-year in Q1 and are projected to grow by 53% in Q2, driven by the demands of testing AI and HBM chips, according to SEMI.
Spending on packaging and test equipment also recorded double-digit growth, supported by rising demand for high-density integration and advanced packaging technologies.
Global installed wafer fab capacity continues to expand, underpinned by increased capital investment. Capacity is projected to exceed 42.5 million 300mm-equivalent wafers per quarter in Q1 2025, which is up 2% from the previous quarter and 7% year-over-year.
SEMI noted that China remains the leading region for wafer capacity expansion. However, the report adds that its growth momentum is expected to moderate in the coming quarters.
Japan and Taiwan, however, are seeing the fastest quarterly capacity increases, driven by major investments in Japan’s power semiconductor sector and the ramp-up of a cutting-edge foundry in Taiwan.
Global semiconductor firms have been ramping up spending and during its Q1 2025 earnings call, TSMC reaffirmed its full-year CapEx guidance of $38 billion to $42 billion, in line with market expectations. This would mark a record high, with the midpoint reaching $40 billion.
TSMC’s capital spending in Q1 stood at $10.06 billion, slightly down from the $11.23 billion in the previous quarter.
TSMC has said that it expects about 70% of its 2025 capital expenditures to go toward advanced process technologies, 10% to 20% toward specialty technologies, and another 10% to 20% for advanced packaging, testing, photomask production, and other areas.
China’s largest foundry, SMIC, plans to invest $7 billion in capital expenditures this year, as disclosed during its Q1 2025 earnings call. The increased spending reflects growing domestic demand and efforts to advance chipmaking technologies following US sanctions that barred TSMC from supplying chips to Huawei.
