According to the forecast data released recently by the International Semiconductor Industry Association (SEMI), global wafer factory equipment expenditure in 2023 is expected to decrease by 22% year-on-year to $76 billion, from a record $98 billion in 2022. By 2024, there will be a recovery, with a year-on-year increase of 21% to $92 billion.

Global wafer factory equipment expenditure from 2020 to 2024 (Data source: World wafer factory forecast report released by SEMI)

SEMI stated that the decline in global wafer factory equipment spending in 2023 was mainly due to weaker chip demand and an increase in consumer and mobile equipment inventory. The recovery in wafer factory equipment spending next year is due in part to the end of the semiconductor inventory adjustment in 2023 and the increased demand for semiconductors in the high-performance computing (HPC) and automotive sectors.

Bu Rixin, General Manager of Chuangdao Investment Consulting, said that the main reason for the decline in global wafer fab equipment in 2023 was that investment expenditure growth exceeded expectations in previous years. Now, the industry is gradually returning to its normal scale. Before there is no new growth point in downstream demand, there is no core motivation for large-scale expansion of the capacity of upstream wafer fabs.

"The semiconductor industry is a very mature industry, with both large and small cycles. Large cycles are industrial upgrades driven by technological development, while small cycles are short-term fluctuations in supply and demand. The impact of small cycles on the industry will not last too long. What really promotes industrial development is the growth of downstream demand driven by technological progress. A major factor driving the further development of the semiconductor industry in the future will be the digital transformation of the industry For example, the AI big model that the industry has been paying close attention to recently. "The demand for high-performance computing power in these industries is the underlying support for building the future digital world, and is also the core driving force for the development of the semiconductor industry." Bu Rixin told China Electronic News.

SEMI data shows that Taiwan, China will spend 24.9 billion dollars on wafer factory equipment in 2024, continuing to rank first in the world. South Korea came second, with approximately $21 billion. Chinese Mainland is about US $16 billion, equivalent to 2023, ranking third in the world. It is expected that the Americas will remain the fourth largest spending region, with investment reaching a record $11 billion in 2024, a year-on-year increase of 23.9%. It is expected that investment in Europe and the Middle East will also set a record next year, increasing by 36% to reach $8.2 billion. In 2024, wafer factory equipment expenditures in Japan and Southeast Asia are expected to increase to $7 billion and $3 billion, respectively.