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Global Semiconductor Manufacturing Industry Results

As the curtain fell on 2024, the global semiconductor manufacturing sector celebrated a noteworthy performance in the fourth quarter, reflecting promise and resilience. According to SEMI's latest report, prepared in collaboration with TechInsights, the industry's year-on-year growth was significant across most key sectors, as well as demonstrating an overall robust closing for the fiscal year.

After experiencing a dip in the early months of 2024, electronics sales surged later in the year, culminating in a 2% annual increase. Notably, Q4 alone witnessed a 4% year-on-year rise and a modest 1% increase anticipated for Q1 2025, largely due to seasonal patterns. In a particularly impressive showing, integrated circuit (IC) sales soared by 29% year-on-year in the final quarter, with projections indicating an additional 23% growth as demand continues to be propelled by advancements in AI technology. This remarkable trend points towards a global appetite for high-performance computing and data center memory chips.

However, it wasn't just electronics sales that saw a revival. Semiconductor capital expenditures (CapEx), which had tapered off in the first half of the year, showcased a significant rebound. By the end of 2024, CapEx grew by an impressive 3% annually. Noteworthy contributions came from memory-related CapEx, which recorded a tremendous 53% quarter-on-quarter and 56% year-on-year spike in Q4. Non-memory sectors also marked improvements, reflecting a recovery in broader investment sentiment. Analysts forecast that the trend will continue into Q1 2025, with total CapEx expected to soar by 16% compared to the same period last year, driven by robust investments focused on High Bandwidth Memory (HBM) to support AI initiatives.

In terms of semiconductor capital equipment, the sector remained steadfast, largely attributed to increased financial commitments towards expanding leading-edge logic, advanced packaging, and HBM capacities. Wafer fab equipment (WFE) spending illustrated resilience, climbing 14% year-on-year and 8% quarter-on-quarter in Q4 2024. While China's investment had historically been a major driver in the WFE market, signs indicate a slight slowdown at the end of 2024. The back-end equipment segment, however, shone brightly, particularly within the Test sector which registered a phenomenal 55% year-on-year leap, along with a 15% rise in Assembly and Packaging during the same timeframe. Forecasts suggest continued growth in both sectors moving into Q1 2025, as they capitalize on ongoing market demands.

An impressive milestone was achieved in Q4 2024 as installed wafer fab capacity surpassed a staggering 42 million wafers per quarter. Analysts predict an additional increase to nearly 42.7 million wafers in Q1 2025. Depending on segment dynamics, Foundry and Logic-related capacity saw growth at 2.3% quarter-on-quarter in Q4 2024 and is expected to continue with a projected 2.1% growth in Q1 2025, significantly aided by advanced node capacity expansions. Memory capacity demonstrated slight growth at 1.1% during Q4, anticipated to maintain this level moving into Q1 2025 due to sustained demand for HBM products.

Clark Tseng, Senior Director of Market Intelligence at SEMI, expressed optimism, noting, "Despite seasonality and macroeconomic challenges, momentum in AI-driven investments continues to fuel expansion across key segments, including memory, capital expenditures, and wafer fab equipment. The outlook for 2025 remains cautiously optimistic, with growth prospects primarily driven by strong demand for high-performance computing and data center development."

Looking ahead, TechInsights’ Director of Market Analysis, Boris Metodiev, indicated that while the initial half of the year may exhibit flat sales, the latter half is projected to witness a robust double-digit increase as the industry adjusts to existing inventory challenges associated with discrete, analog, and optoelectronic manufacturers.

The Semiconductor Manufacturing Monitor (SMM) report encapsulates comprehensive data on the global semiconductor landscape, highlighting critical trends based on key industry metrics. Readers can expect thorough insights into capital equipment, fabricator capacity, and semiconductor sales trends, supported by historical and predictive analytics. SEMI encourages interested parties to explore further by subscribing to its reports for in-depth market intelligence and analysis.

For those seeking detailed information about the semiconductor landscape and SEMI's contributions, the association is committed to fostering growth through collaborative efforts amongst its expansive member base—connecting over 3,000 companies globally. By addressing the industry's most pressing challenges through advocacy and market intelligence, SEMI is paving the way for advancements in technology and manufacturing.