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SEMI's Projection on Advanced Chipmaking Growth

The global semiconductor industry is set for a monumental shift, fueled by the rapid advancements in artificial intelligence (AI). According to SEMI, the leading association representing the semiconductor and electronics design and manufacturing sectors, a significant growth of 69% in advanced chipmaking capacity is expected by the year 2028. This forecast stems from findings detailed in SEMI's latest report, which underscores the industry's expansion efforts in response to burgeoning demand for generative AI technologies.

Unprecedented Increase in Capacity

The report highlights a potent growth trajectory for the semiconductor manufacturing sector, projecting a compound annual growth rate (CAGR) of 7% from the end of 2024 through 2028. This means capacity could soar to an astounding 11.1 million wafers per month (wpm). A primary driver behind this remarkable growth is the need for advanced manufacturing processes, particularly for chips with nodes of 7nm and below. The capacity for these advanced nodes is estimated to rise from 850,000 wpm in 2024 to about 1.4 million wpm by 2028, yielding a CAGR of around 14%—significantly higher than the overall industry average.

In light of these findings, Ajit Manocha, SEMI's President and CEO, remarked, "AI continues to be a transformative force in the global semiconductor industry, driving significant expansion of advanced manufacturing capacity." He emphasized that the ongoing proliferation of AI applications is catalyzing substantial investment within the semiconductor ecosystem, a clear testimony to the sector's crucial role in facilitating tech innovation and fulfilling the escalating demand for sophisticated chips.

AI’s Expanding Role in the Semiconductor Sector

The rise of AI is not merely about larger training capacities; it's also about enhancing inference processes, which have become vital to various applications ranging from personal assistants to cutting-edge augmented and virtual reality systems. The relentless push of AI technologies is solidifying the demand for advanced semiconductor capabilities, especially in the domains of humanoid robotics and innovative use cases that require complex processing power.

Maintaining Growth in Advanced Process Capacity

SEMI's report predicts that advanced process capacity will sustain a robust 14% CAGR from 2025 through 2028, starting with 982,000 wpm in 2025. By 2026, production capacity is on track to exceed 1 million wafers for the first time, reaching 1.16 million wpm. Furthermore, the drive to support 2nm and below capacities is projected to see significant scaling, with production expected to jump from less than 200,000 wpm in 2025 to over 500,000 wpm by 2028. This dynamic growth trajectory illustrates the influence of AI in shaping the semiconductor landscape.

Equipment Investment Surges

As technological needs evolve, so too does the investment landscape within the semiconductor sector. SEMI forecasts that capital expenditure on advanced process equipment will increase dramatically, projecting over $50 billion invested by 2028—marking a remarkable 94% rise from the $26 billion spent in 2024. This trajectory highlights the industry's commitment to develop cutting-edge manufacturing capabilities, reflecting an impressive 18% CAGR in capital expenditures.

The shift towards advanced nodes is accelerating, with 2nm technology expected to achieve mass production by 2026, followed closely by the introduction of 1.4nm technology in 2028. Chip manufacturers are strategically enhancing production capacity ahead of time, with forecasted growth rates of 33% in 2025 and 21% in 2027. Investments specifically in 2nm and smaller wafer equipment are particularly noteworthy, with expectations that funding will leap from $19 billion in 2024 to around $43 billion in 2028, showcasing an extraordinary 120% increase.

Conclusion

As the semiconductor industry navigates through unprecedented growth fueled by AI applications, SEMI's detailed insights into the future of advanced chipmaking underscore a transformative period. The transition towards high-capacity production will not only redefine the landscape of semiconductor manufacturing but will also pave the way for innovative technologies shaping our future. For those interested in the landscape of semiconductor manufacturing, exploring SEMI's 300mm Fab Outlook report is highly recommended for further insights and detailed projections on this evolving industry.