Europe sees record year as global fab equipment spending hits new high

Europe sees record year as global fab equipment spending hits new high

Market news |
By Nick Flaherty

Investments in chip-making capacity to address the chip shortage are driving the fab equipment markets to a new high this year, says the latest data from SEMI in the World Fab Forecast report.

Global fab equipment spending for front-end facilities is expected to jump 18% year-over-year (YOY) to an all-time high of $107 billion in 2022. This will be the third consecutive year of growth following a 42% surge in 2021.

Europe and the Middle East is forecast to log record high spending of $9.6bn this year, a growth of 248% year-on-year. This is set to be boosted in the next two to three years by Intel’s investments in expanding Leixlip, Ireland, and building two new fabs in Madgeburg, Germany.

However the long lead times for fab equipment from companies such as ASML in Europe and Applied Materials in the US is a key issue for boosting capacity.

“Crossing the $100 billion mark in spending on global fab equipment for the first time is a historic ​milestone for the semiconductor industry,” said Ajit Manocha, president and CEO of SEMI. “This ​significant achievement is a tribute to the relentless drive to add and upgrade capacity to address a diverse range of markets and emerging applications, solidifying expectations for long-term industry growth to enable electronics for the digital world.” 

“Global fab equipment spending is forecast to have another healthy year in 2023 and is expected to remain above the $100 billion mark,” said Sanjay Malhotra, vice president of Corporate Marketing and the Market Intelligence Team at SEMI. “We expect global semiconductor capacity to maintain steady growth this year and in 2023.”

Taiwan is expected to lead fab equipment spending in 2022, increasing investments 56% YoY to US$35 billion, followed by Korea at US$26 billion, a 9% rise, and China at US$17.5 billion, a 30% drop from its peak last year.

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Taiwan, Korea and Southeast Asia are also expected to register record high investments in 2022. In the Americas, the report shows fab equipment spending peaking at US$9.8 billion by 2023.

The SEMI World Fab Forecast report shows the global industry increasing capacity 8% this year after a 7% rise in 2021. Capacity growth is expected to continue increasing, rising 6% in 2023. The fab equipment industry last saw a YoY installed capacity growth rate of 8% in 2010, when it topped 16 million wafers per month (200mm equivalents) – nearly half of the 29 million wafers per month (200mm equivalents) projected for 2023.

Over 83% of equipment spending in 2022 will stem from capacity increases at 150 fabs and production lines, a proportion expected to edge down to 81% next year as 122 known fabs and lines add capacity.  

The foundry sector, with a market share of about 50%, will account for the bulk of equipment spending in 2022 and 2023, followed by memory at 35%. The two sectors also represent most of the capacity increases.

The SEMI World Fab Forecast report lists 1,426 facilities and lines globally, including 124 future facilities and lines with various probabilities that are expected to start volume production no sooner than 2022. 

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