The global semiconductor industry is expected to surpass $1 trillion by 2030.

On September 25, the 12th Annual Conference of the China Electronic Special Equipment Industry Association for Semiconductor Equipment and the 12th Semiconductor Equipment and Core Components Exhibition (CSEAC 2024) opened in Wuxi.

At the opening ceremony of the conference and the Integrated Circuit (Wuxi) Innovation Development Conference (ICIDC), SEMI China Senior Director Feng Li delivered a keynote speech titled “Overview of the Global Semiconductor Market,” offering an in-depth analysis of the current state and future trends of the global and Chinese semiconductor equipment industries.

Key information from Feng Li’s speech includes:

•  Global Semiconductor Market Trend: A 16% revenue growth for the global semiconductor industry is expected in 2024.

•  Global Wafer Production Capacity: A 6% annual increase, with China’s 12-inch wafer capacity projected to account for 26% by 2026.

•  Global Semiconductor Equipment: Total shipments reached $53.2 billion in the first half of 2024, with a 16% rebound anticipated by 2025.

•  China’s Semiconductor Industry: Self-sufficiency is improving, with expectations of reaching 26.6% by 2027.

Global Semiconductor Market Trends

Feng Li highlighted that the global chip shortage reached its peak in 2021 due to a combination of structural supply-demand imbalances, the pandemic, natural disasters, and geopolitical tensions. Despite some recovery, by the second quarter of 2021, the global semiconductor supply chain inventory indicator from Gartner still indicated shortages, with levels slightly above Q1 but below 0.9. While the market began recovering in 2022, inventory imbalances persisted, with an oversupply of certain chips and shortages in others.

Despite these challenges, the global semiconductor industry is expected to grow by 16% in 2024, with an additional 12.5% growth expected by 2025. The strong growth of logic and memory chips will be the key drivers for 2024, with logic chips increasing by 10.7% and memory chips by 76.8%. According to the latest WSTS data, global semiconductor sales are expected to rise from $526.9 billion in 2023 to a record $611.2 billion in 2024. The market is projected to grow by another 12.5% to $687.4 billion in 2025, with annual growth rates exceeding 10% driven by AI and automotive chips. By 2030, the industry could surpass $1 trillion in scale.

Global Semiconductor Wafer Capacity

The SEMI World Fab Forecast’s latest quarterly report shows that global semiconductor manufacturing capacity is expected to grow by 6% in 2024 and 7% in 2025, reaching a record monthly wafer production capacity of 33.7 million wafers per month (8-inch equivalent). Notably, capacity for 5-nanometer and smaller processes is expected to increase by 13% in 2024, driven by demand from data centers and generative AI. By 2027, growth is projected to reach 17% for advanced nodes.

Reflecting on the historical shift in chip production capacity, Feng Li noted that in 2000, the U.S. and Japan dominated with nearly half of global semiconductor capacity, while mainland China held only 2%. By 2010, capacity began shifting to Asia, with South Korea and Taiwan accounting for 35% of global capacity, while China’s share rose to 9%. By 2020, with the construction and expansion of Chinese production lines, mainland China’s capacity increased to 17%. Looking ahead, China’s 300mm wafer capacity is expected to reach 26% by 2026.

Meanwhile, governments around the world have recognized the strategic importance of semiconductors, introducing various subsidy policies to support the supply chain. Countries like the U.S. and those in Europe have enacted chip legislation, while South Korea and Japan are providing substantial financial support to the industry. China has also implemented several industrial policies to support semiconductors, launching the first and second phases of large funding initiatives, with a third phase introduced this year.

Leading global semiconductor manufacturers, including Samsung, TSMC, and Intel, have focused on advanced processes, automotive chips, and power compound semiconductors over the past year. Collectively, these companies have invested over $30 billion annually in capital expenditures, with the top five semiconductor fabs accounting for nearly 70% of global capital expenditure.

Global Semiconductor Equipment Sales

In terms of equipment investment, global semiconductor equipment shipments grew by 4% year-on-year in the second quarter of 2024, reaching $26.8 billion. For the first half of 2024, total shipments amounted to $53.2 billion, reflecting the industry’s overall health.

Investment in Europe, the U.S., and Southeast Asia is expected to nearly double in the next three years compared to the previous three. South Korea, mainland China, and Taiwan remain key regions for semiconductor equipment spending, with China projected to lead the way, with investments totaling $144 billion over the next three years.

Feng Li pointed out that in 2024, total investments in semiconductor equipment will reach $109 billion, with 90% directed towards front-end equipment and 10% towards back-end and testing equipment. By 2025, the global semiconductor equipment market is expected to rebound by 16%, surpassing $127 billion, with all segments showing double-digit growth.

Due to weak demand for mature nodes, Foundry/Logic spending is expected to decrease by 3% in 2024 but rebound by 10% in 2025. DRAM equipment spending is forecasted to surge by 24% to $17 billion in 2024, followed by a 12% increase to $19 billion in 2025 due to capacity expansion and investments in HBM. NAND equipment sales are expected to remain flat in 2024, with a modest 1.5% growth, but a substantial 56% increase to $15 billion is forecasted for 2025.

Driven by demand in automotive applications, global front-end 300mm equipment spending is expected to surpass $120 billion in 2025 for the first time, reaching a record $137 billion by 2027, fueled by advancements in cutting-edge processes.

Feng Li concluded by noting that China’s semiconductor industry’s self-sufficiency rate has steadily increased, rising from 14% in 2012 to 18% in 2022, and is expected to reach 26.6% by 2027. However, there remains a significant gap of $146 billion in the industry.

Wuxi, as a key hub for semiconductors, has seized the golden opportunity for the development of equipment, materials, and components, establishing a robust ecosystem that leverages the strengths of the supply chain. Currently, Wuxi’s semiconductor industry output value has reached 250 billion yuan, fostering the rise of major companies like local firms GMS and Limin, as well as returnee-led companies such as Huaying. These equipment manufacturers are set to boost the components market. Backed by the Yangtze River Delta economic zone, Wuxi’s strategic location within a two-hour economic circle of Jiangsu, Zhejiang, and Shanghai, coupled with government coordination and capital support, promises a bright future for the city’s development.

（IRuniverse, Kasumi)

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