Global Semiconductor Fab Capacity Projected to Expand 6% in 2024 and 7% in 2025
MILPITAS, Calif., June 18, 2024 – The global semiconductor manufacturing industry is gearing up for significant capacity expansions to meet the growing demand for chips. According to the latest quarterly World Fab Forecast report by SEMI, capacity is projected to increase by 6% in 2024 and a further 7% in 2025, reaching an all-time high of 33.7 million wafers per month (wpm: 8-inch equivalent).
Leading-edge capacity for 5nm nodes and below is set to grow by 13% in 2024, driven primarily by the demand for generative artificial intelligence (AI) for data center training, inference, and cutting-edge devices. Chip giants such as Intel, Samsung, and TSMC are gearing up to start production of 2nm Gate-All-Around (GAA) chips, contributing to a 17% growth in total leading-edge capacity in 2025.
The rise in AI processing applications, from cloud computing to edge devices, is fueling the competition to develop high-performance chips and fueling the expansive growth of global semiconductor manufacturing capacity, remarked Ajit Manocha, President, and CEO of SEMI. This growth is expected to create a positive cycle where AI drives the semiconductor content growth across various applications, leading to increased investment in the industry.
In terms of regional capacity expansions, Chinese chipmakers are anticipated to lead the way with double-digit growth rates. The region is expected to see a 14% increase in capacity in 2025, nearly a third of the industry’s total, following a 15% surge in 2024. Other major chipmaking regions like Taiwan, South Korea, Japan, the Americas, Europe & Mideast, and Southeast Asia are also forecasted to witness capacity growth, albeit at more modest rates.
The foundry segment is set for substantial growth, with an expected 11% increase in capacity in 2024 and a further 10% in 2025. This growth can be attributed to Intel’s foray into the foundry business and China’s robust capacity expansion efforts.
Moreover, the memory sector is also poised for growth due to the rapid adoption of high bandwidth memory (HBM) driven by the increasing demand for faster processors required by AI servers. Leading DRAM makers are ramping up their investment in HBM/DRAM to meet this demand, with DRAM capacity expected to rise by 9% in both 2024 and 2025. On the other hand, the 3D NAND market is projected to see slow recovery, with no capacity growth forecasted for 2024 but a 5% increase expected in 2025.
The expansion of AI applications in edge devices is expected to further boost the demand for DRAM, with mainstream smartphones requiring higher DRAM content and laptops needing more memory to support AI assistants.
In conclusion, the global semiconductor manufacturing industry is gearing up for significant capacity expansions to meet the burgeoning demand for chips, driven by advancements in AI applications and the need for high-performance processors. With various regions and segments poised for growth, it is clear that the industry is on an upward trajectory, setting the stage for further innovations and developments in the semiconductor space.
