South Korea’s chipmaking spend to overtake China’s in 2024

South Korea’s chipmaking spend to overtake China’s in 2024

Market news |
By Peter Clarke

South Korea is set to overtake China and rank second in spending on chipmaking equipment for 2024, according to industry body SEMI.

Taiwan is expected to remain the top ranked region but US sanctions against the export of leading-edge chipmaking equipment to China is expected to keep China’s spending flat while South Korea is expected to make a surge in spending so that it reclaims second place, SEMI said.

Overall the global fab equipment spending for front-end facilities is expected to decrease 22 percent year-over-year (YoY) to US$76 billion in 2023 before rising 21 percent YoY to US$92 billion in 2024.

Front-end fab equipment spending 2020 to 2024F. Source: SEMI

The 2023 decline is driven by weak chip demand and high levels of chip inventory for consumer electronics and smartphones in particular.

As the surplus of chips corrects in 2023 demand is expected to increase driving increased spending in 2024, particularly in the high-performance computing (HPC) and automotive segments, SEMI said.

Nation/region Spending         Y-o-y increase

Taiwan                  $24.9 bn                4.2%

South Korea         $21 bn                  41.5% 

China                    $16 bn                     0.0%

Americas              $11 bn                   23.9%

Europe                 $8.2 bn                 36.0%

Japan                   $7.0 bn

Rest of SE Asia   $3.0 bn

Ranking of nations/regions by front-end fab equipment spending 2024. Source: SEMI

The SEMI World Fab Forecast report shows the global semiconductor industry increasing capacity by 4.8 percent in 2023 after a 7.2 percent rise in 2022. Capacity growth is expected to continue in 2024, rising 5.6 percent.

Foundries will decrease their spending less than the overall average in 2023 but increase it less in 2024. The foundry spend in 2023 is expected to be US$43.4 billion in investments, a 12.1 percent annual decline. In 2024 the spen will be US$48.8 billion, a 12.4% increase. Memory is forecast to place second in global spending in 2023 despite a 44.4 percent YoY decline to US$17.1 billion, with investments rising to US$28.2 billion in 2024.

Unlike other segments, analog and power will see a steady expansion with a forecast spending increase of 1.3% to US$9.7 billion in 2023 on the strength of stable growth in the automotive market. Investments by the segment are expected to remain flat next year.

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