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Record Growth in Semiconductor Equipment Sales

The global semiconductor equipment industry is on the brink of a remarkable expansion, with sales projected to reach an unprecedented $139 billion by 2026. According to a report by SEMI, this promising trajectory heralds a period of growth spurred by robust investments across various sectors, particularly in artificial intelligence (AI) and regions such as China.

Yearly Projections of Sales

In its Year-End Total Semiconductor Equipment Forecast, SEMI revealed that 2024 is expected to witness sales soar to $113 billion, reflecting a year-on-year increase of 6.5%. Looking ahead, the industry anticipates reaching $121 billion in 2025 before hitting the astounding figure of $139 billion in 2026. These figures underscore the significance of semiconductor manufacturing in driving the global economy and fostering technological innovation.

Contributing Factors to Growth

Ajit Manocha, SEMI President and CEO, emphasized the essential role the semiconductor industry plays in economic development and the evolution of innovative technologies. The forecast has been positively impacted by better-than-expected investments from China as well as increases in AI-centric sectors. This supports the notion that semiconductor equipment spending is not only resilient but also crucial for advancing high-tech applications and devices.

Segment Breakdown

The growth in sales can be attributed to various segments within the semiconductor equipment market. The wafer fab equipment (WFE) segment is anticipated to hit a record $101 billion in 2024, marking a 5.4% increase from the previous year. This surge is largely driven by continuous investments in dynamic random access memory (DRAM) and high-bandwidth memory (HBM) sectors, which are essential for AI computing.

In terms of recovery, the back-end equipment market is witnessing a significant turnaround after two challenging years. Sales for semiconductor test equipment are expected to spike by 13.8% in 2024, while sales in assembly and packaging are projected to grow by an impressive 22.6%. As the demand for intricate semiconductor devices rises—particularly in high-performance computing—back-end equipment is anticipated to gain further traction.

Regional Insights

Regionally, China, Taiwan, and Korea hold the reins as the top three consumers of semiconductor equipment. China, in particular, is predicted to continue leading with record equipment purchases, reaching $49 billion in 2024 despite an anticipated slowdown in spending in subsequent years. Other regions may experience fluctuations in spending, though increases are expected overall in 2026.

The Road Ahead

The demand for advanced wafer fab applications also showcases promising growth potential. The segment associated with foundry and logic applications is expected to maintain stable sales, reflecting prudent spending in mature nodes. As manufacturers transition towards cutting-edge technologies and new device architectures, an uptick in capacity expansion purchases is predicted. Furthermore, memory-related capital expenditures are set to soar, driven by unprecedented demand for HBM in AI applications.

Overall, SEMI's latest forecast suggests a bright future for the semiconductor equipment market, bolstered by various growth drivers encompassing different segments, applications, and geographical areas. Continued innovation and strategic investment within the industry are fundamental to maintaining this upward trajectory and harnessing the transformative potential of semiconductor technology.