The bulk of fab investments in 2021 and 2022 will be seen in the foundry and the memory sectors
Fueled by surging pandemic-inspired demand for electronics devices, the global semiconductor industry is on track to register a rare three consecutive years of record highs in fab equipment spending. This includes a 16 per cent increase in 2020 followed by forecast gains of 15.5 per cent this year and 12 per cent in 2022, SEMI has highlighted in its quarterly World Fab Forecast report.
“Fabs worldwide will add about $10 billion worth of equipment in each of the three years as spending climbs to top $80 billion at the end of the forecast period. Explosive demand for electronics that are the backbone of communications, computing, healthcare and online services – sectors that mounted robust responses to the COVID-19 outbreak as the world rallied to curb the coronavirus’s spread – account for much of the spending,” read a press note by SEMI.
Bulk investments in foundry and the memory sectors
The bulk of fab investments in 2021 and 2022 will be seen in the foundry and the memory sectors. Driven by leading edge investment, foundry spending is expected to grow 23 per cent in 2021, reach $32 billion and flatten in 2022. Overall memory spending will increase in the single digits to reach $28 billion in 2021 while DRAM will surpass NAND Flash, and then surge by 26 per cent in 2022 on the strength of both DRAM and 3D NAND investment.
The power and MPU segment will also see strong spending growth over the forecast period. Power is forecast to show strong investment growth of 46 per cent and 26 per cent, respectively, in 2021 and 2022 driven by strong demand for power semiconductor devices. MPU will add to the momentum with 40 per cent growth in 2022 as microprocessor investments increase.
The report read, “Fab equipment spending has historically been cyclical, with one or two years of growth typically followed by a downtrend of roughly equal length. The semiconductor industry last saw three straight years of fab equipment investment growth in a run that started in 2016. It was nearly 20 years before that streak that the industry recorded an expansion of at least three years. In the mid-1990s, the chip industry boasted a four-year period of growth.”
North America-based manufacturers of semiconductor equipment had posted $3.04 billion in billings worldwide in January 2021 (three-month average basis). This was the first time monthly billings had reached $3 billion. The billings figure is 13.4 percent higher than the final December 2020 billings of $2.68 billion and is 29.9 percent higher than the January 2020 billings level of $2.34 billion.
