SEMI International, the Semiconductor Equipment and Materials International, in its latest update of the Mid-Year Semiconductor Equipment Forecast Report, points out that global semiconductor manufacturing equipment sales by OEMs are expected to reach $109 billion this year, marking a 3.4% year-over-year increase and setting a new record.

Driven by growth in both front-end and back-end segment markets, semiconductor manufacturing equipment sales are projected to achieve a robust double-digit growth of approximately 17% by 2025, reaching a new high of $128 billion.

SEMI President and CEO Ajit Manocha stated, "This year, semiconductor manufacturing equipment sales have already begun to grow, with expectations for a strong 17% growth by 2025. The global semiconductor industry is demonstrating strong fundamentals and growth potential, supporting various disruptive applications emerging in the wave of artificial intelligence."

1. Semiconductor equipment sales (segmented by market subcategories)

In 2023, semiconductor equipment sales in the wafer fab equipment segment, encompassing wafer processing, fab facilities, and mask/reticle equipment, reached $96 billion USD, exceeding earlier forecasts of $93 billion USD. For 2024, a modest increase of 2.8% is anticipated, with sales projected to reach $98 billion USD. The primary drivers behind this upward revision include robust demand in AI computing, sustained strong equipment expenditures in Mainland China, and substantial investments in DRAM and High Bandwidth Memory (HBM).

Looking ahead to 2025, a notable growth of 14.7% is forecasted in the wafer fab equipment segment, with sales expected to soar to $113 billion USD. This growth is attributed to increasing demand for advanced logic and memory applications.

Meanwhile, the backend equipment segment, which faced contraction over the past two years due to challenging macroeconomic conditions and tepid semiconductor demand, is poised for recovery starting in the latter half of 2024. Specifically, semiconductor test equipment sales in 2024 are projected to grow by 7.4% to $6.7 billion USD, while packaging equipment sales are forecasted to increase by 10.0% to $4.4 billion USD in the same period. Accelerated growth is anticipated in 2025 for the backend segment, with test equipment sales expected to surge by 30.3% and packaging equipment by 34.9%.

Complexity in high-performance computing (HPC) semiconductor devices and anticipated recoveries in automotive, industrial, and consumer electronics terminal markets further bolster growth in these segments. Additionally, as new frontend wafer fab supplies increase, backend growth prospects are expected to strengthen progressively over time.

* Total equipment includes new fabs, testing, assembly, and packaging. Total equipment excludes wafer manufacturing equipment. Due to rounding, totals may not sum up precisely.

2. Wafer fabrication equipment (WFE) sales by application

The organization indicated that due to soft demand for mature nodes and higher-than-expected sales of advanced nodes in the previous year, equipment sales for wafer fabs and logic applications are expected to moderately decline by 2.9% year-on-year to $57.2 billion in 2024. With increased demand for cutting-edge technologies, adoption of new equipment architectures, and capacity expansion procurements, this segment is projected to grow by 10.3% to reach $63.0 billion in 2025.

The report noted that capital expenditures related to storage are expected to see the most significant growth in 2024 and continue in 2025. As supply and demand normalize, NAND equipment sales are forecasted to remain relatively stable in 2024, with a slight increase of 1.5% to $9.35 billion, and to grow substantially by 55.5% to $14.6 billion in 2025. Meanwhile, benefiting from increased demand driven by AI deployments and ongoing technology migrations, DRAM equipment sales are expected to grow strongly by 24.1% and 12.3% in 2024 and 2025, respectively.

3. Semiconductor equipment sales (by region)

According to SEMI's projections through 2025, Mainland China, Taiwan, and South Korea are expected to remain the top three markets for semiconductor equipment spending by region. With continued growth in equipment procurement in Mainland China, it is anticipated to maintain its leading position throughout the forecast period. Shipments of equipment to Mainland China are projected to exceed $35 billion in 2024. Equipment expenditures in some regions are expected to decline in 2024 and rebound in 2025. Following substantial investments over the past three years, Mainland China is forecasted to experience a contraction in 2025.