Semiconductor manufacturers will spend a record $400 billion on equipment to make computer chips between 2025 and 2027, with China, South Korea and Taiwan leading the way, the Semiconductor Industry Association (SEMI), a global industry association, said in estimates released Thursday.

Key drivers include additional demand for excess capacity in geographic regions amid U.S.-China trade tensions, and demand for artificial intelligence chips and related memory chips. The association estimated in a report that equipment spending will grow 24% to $123 billion by 2025. Major equipment suppliers include ASML, Applied Materials, KLA, Lam Research and Tokyo Electron.

"Mainland China is expected to remain the largest spending region, with investments exceeding $100 billion over the next three years, driven by a national self-sufficiency policy," SEMI said, adding that spending in China is falling from record levels this year.

South Korea, home to memory chipmakers Samsung and SK Hynix, is also on an equipment buying spree, spending $81 billion over the same period. By comparison, spending in Taiwan, home to TSMC, the world's largest chip foundry, was $75 billion. The company is also building plants in the U.S., Japan and Europe.

Spending in other regions is estimated at $63 billion in the Americas, $32 billion in Japan and $27 billion in Europe.

"Notably, equipment investment in these regions is expected to more than double in 2027 from 2024, driven by policy incentives designed to ease supply concerns for key semiconductors," SEMI said.

01 SEMI: Semiconductor industry

To invest $400 billion in 300mm wafer fab equipment over three years

Globally, spending on 300mm fab equipment is expected to grow 4% in 2024 to $99.3 billion and further increase 24% in 2025 to $123.2 billion, exceeding the $100 billion level.

SEMI said spending growth is driven by the regionalization of semiconductor fabs and growing demand for artificial intelligence (AI) chips in data centers and edge devices.

Global spending on 300mm fab equipment is expected to grow 4% to $99.3 billion in 2024 and further increase 24% to $123.2 billion in 2025, exceeding the $100 billion level. Spending is expected to grow 11% to $136.2 billion in 2026 and 3% to $140.8 billion in 2027.

"Global 300mm fab equipment spending is expected to increase significantly in 2025, setting the stage for three years of record semiconductor manufacturing investment," said Ajit Manocha, president and CEO of SEMI. "The broad global demand for chips is driving equipment spending, both for cutting-edge technologies such as those driven by artificial intelligence applications and mature technologies driven by automotive and IoT applications."

China is expected to remain the world's largest region for 300mm equipment spending through 2027, investing more than $100 billion over the next three years, driven by the country's self-sufficiency policy. However, spending is expected to gradually decline from a peak of $45 billion in 2024 to $31 billion in 2027.

The Americas are expected to invest $63 billion between 2025 and 2027, while Japan, Europe and the Middle East, and Southeast Asia are expected to invest $32 billion, $27 billion, and $13 billion, respectively, over the three-year period. Notably, equipment investment in these regions is expected to more than double in 2027 compared to 2024, thanks to policy incentives designed to ease supply concerns for key semiconductors.

02 Predictions 2025 to 2027

Foundry equipment spending is expected to reach approximately $230 billion between 2025 and 2027, driven by investments in cutting-edge nodes below 3nm and continued investments in mature nodes. Investments in 2nm logic processes and the development of 2nm key technologies, such as gate-all-around (GAA) transistor structures and backside powering technology, are critical to meeting future high-performance and energy-efficient computing needs, especially for artificial intelligence applications. Cost-effective 22nm and 28nm processes are expected to grow due to growing demand for automotive electronics and IoT applications.

The logic and microelectronics segment is expected to lead equipment spending expansion over the next three years, with total investments expected to reach $173 billion. The memory segment ranks second and is expected to contribute more than $120 billion in spending over the same period, marking the beginning of another segment growth cycle. In the memory segment, investments in DRAM-related equipment are expected to exceed $75 billion, while investments in 3D NAND are expected to reach $45 billion.

Power-related areas are in third place, with investments expected to exceed $30 billion over the next three years, including about $14 billion in compound semiconductor projects. The analog and mixed-signal area is expected to reach $23 billion over the same period, followed by the optoelectronics/sensors area with $12.8 billion.

Reference link: https://www.canadianmanufacturing.com/manufacturing/semiconductor-industry-to-invest-400b-in-300mm-fab-equipment-in-3-yrs-semi-303171/

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