Global Semiconductor Fab Capacity To Expand: SEMI

To keep pace with unremitting growth in demand for chips, the global semiconductor manufacturing industry is expected to increase capacity by 6% in 2024 and post a 7% gain in 2025, reaching a record capacity high of 33.7 million wafers per month (wpm: 8-inch equivalent), SEMI announced in its latest quarterly World Fab Forecast report.

Leading-edge capacity for 5nm nodes and under is expected to grow 13% in 2024, chiefly driven by generative artificial intelligence (AI) for data center training, inference, and leading-edge devices.

To increase processing power efficiency, chipmakers including Intel, Samsung, and TSMC are poised to start production of 2nm Gate-All-Around (GAA) chips, boosting total leading-edge capacity growth by 17% in 2025.

“The proliferation of AI processing, from cloud computing to edge devices, is fueling the race to develop high-performance chips and driving a robust expansion of global semiconductor manufacturing capacity,” said Ajit Manocha, SEMI president and CEO. “This creates a virtuous cycle: AI will drive the growth of semiconductor content across a diverse range of applications, which in turn encourages further investment.”

Capacity Expansion by Region

Chinese chipmakers are expected to maintain double-digit capacity growth, registering a 14% increase to 10.1 million wpm in 2025 – nearly a third of the industry’s total – after logging a 15% rise to 8.85 million wpm in 2024. Major foundry suppliers including Huahong Group, Nexchip, Sien Integrated and SMIC and DRAM maker CXMT are investing heavily to grow the region’s semiconductor manufacturing capacity.

Most of the other major chipmaking regions are expected to see capacity growth of no more than 5% in 2025. Taiwan is forecast to rank second in capacity in 2025 at 5.8 million wpm, a 4% growth rate, while South Korea is projected to take the third spot next year, expanding capacity 7% to 5.4 million wpm after surpassing the 5 million wpm mark for the first time in 2024.

Japan, the Americas, Europe & Mideast, and Southeast Asia are expected to grow semiconductor manufacturing capacity 4.7 million wpm (3% YoY), 3.2 million wpm (5% YoY), 2.7 million wpm (4% YoY), and 1.8 million wpm (4% YoY), respectively.

Capacity Expansion by Segment

Fueled largely by Intel’s establishment of its foundry business and China’s capacity expansion, the foundry segment is projected to increase capacity 11% in 2024 and 10% in 2025, reaching 12.7 million wpm by 2026.

By contrast, the 3D NAND market recovery remains slow, with no growth in capacity forecast for 2024 and a 5% increase expected in 2025.