Chipmakers still investing in new fab kits as demand slows • The Register

Semiconductor fab investment is projected to grow 9 percent by the end of 2022 to a new global high of $99 billion as the industry continues to ramp up capacity despite the deteriorating global economic outlook.

These figures are from the last quarter World Fab Forecast Report published by SEMI, the industry association for the electronics manufacturing and supply chain. It is claimed that the semiconductor equipment industry has increased its capacity this year and will do the same in 2023.

“After reaching record levels in 2022, the global fab equipment market is expected to remain healthy over the next year, driven by new fabs and upgrade activity,” SEMI President and CEO Ajit Manocha said in a statement.

The Dutch company ASML, which develops lithography systems for semiconductor manufacturers, reported posted a record $8.7 billion in orders for the second quarter of this year and said it was seeing “extraordinary demand for its chipmaking machines.”

However, in his previous quarterly report SEMI, released in June, predicted that chipmakers’ fab equipment spending would reach $109 billion by the end of this year, so enthusiasm for capacity expansion has already waned somewhat.

We reported on it earlier this month slowed demand for some technology products, and some analysts said the semiconductor industry is heading for “the deepest downturn and inventory correction in over a decade.”

According to SEMI, global semiconductor capacity is already up 8 percent this year, following a 7.4 percent increase in 2021. The fab equipment industry last saw a growth rate of this magnitude in 2010 compared to the previous year, when it reached 16 million Wafer exceeded per month. In contrast, SEMI predicts the industry will reach 29 million wafers per month in 2023, with capacity growing 5.3 percent year-on-year.

SEMI also says the foundry sector accounted for the bulk (53 percent) of semiconductor equipment spending for 2022 and will do so in 2023, followed by memory manufacturing at 32 percent in 2022 and expected 33 percent in 2023. Those two sectors also account for the largest increases in capacity.

Broken down by region, SEMI says Taiwan unsurprisingly leads the way when it comes to investments in fabulous equipment this year, with spending up 47 percent year-on-year to $30 billion.

This aligns with numbers shown by TrendForce earlier this year Taiwan dominates the global semiconductor industrywhich controls 48 percent of the foundry market and 61 percent of the global capacity to build 16nm processes or newer, and will likely remain so for the foreseeable future.

Also in Asia, Korea’s investment in new factories fell 5.5 percent to $22.2 billion, and China fell 11.7 percent to $22 billion from its peak last year.

According to SEMI, the Europe/Middle East region will see a record spending of $6.6 billion, up 141 percent year-on-year, although total spending is still lower than other regions. Strong demand for high performance computing and advanced technologies is driving this, SEMI said.

America and Southeast Asia are also expected to see record investments in 2023, according to SEMI. ®

https://www.theregister.com/2022/09/28/chip_fabrication_investment_semi/ Chipmakers still investing in new fab kits as demand slows • The Register

Laura Coffey

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