The global semiconductor industry is on track to achieve unprecedented sales in the equipment sector. SEMI's latest mid-year report forecasts a 3.4% year-on-year increase, bringing the total to $109 billion in 2024. The momentum is expected to continue into 2025, with a robust growth of approximately 17%, reaching $128 billion in sales.

SEMI's President and CEO, Ajit Manocha, highlights the industry's strong foundation and potential for growth, which is instrumental in supporting the disruptive applications emerging from the AI boom.

Following a record-breaking year in 2023 with $96 billion in sales, the wafer fabrication equipment sector, which includes wafer processing, wafer fab facilities, and mask equipment, is projected to grow by 2.8% to $98 billion this year, surpassing SEMI's previous forecast of $93 billion.

The back-end equipment sector, which faced a two-year contraction due to challenging macroeconomic conditions and weak semiconductor demand, is anticipated to rebound in the second half of this year and accelerate in 2024. This year, semiconductor testing equipment sales are expected to increase by 7.4% to $6.7 billion, while packaging equipment sales are forecasted to grow by 10% to $4.4 billion. In 2025, the testing equipment sales are projected to soar by 30.3%, with assembly and packaging sales also experiencing a 34.9% growth.

The acceleration in the back-end equipment sector is primarily due to the increasing complexity of high-performance computing semiconductor devices and the expected resurgence in demand from the automotive, industrial, and consumer electronics markets. Additionally, growth in this sector is expected to continue over time to accommodate the increasing supply from new front-end wafer fabs.

In terms of application, wafer fab equipment sales for foundry and logic applications are expected to decrease by 2.9% to $57.2 billion this year due to weak demand for mature nodes and higher-than-expected sales for advanced nodes. However, by 2025, this segment is expected to grow by 10.3% to $63 billion, driven by the continuous growth in demand for cutting-edge technology, the introduction of new equipment architectures, and increased procurement for capacity expansion.

Capital expenditures related to memory are expected to show the most significant growth this year and are anticipated to continue growing in 2025. With the normalization of supply and demand, NAND device sales are expected to remain relatively stable this year, with a slight increase of 1.5% to $9.35 billion.

Geographically, Mainland China, Taiwan, and South Korea are expected to remain the top three spenders on equipment in the coming year. Mainland China, with its continued growth in equipment procurement, is forecasted to maintain its leading position during the forecast period. The shipment value to Mainland China this year is expected to exceed a record $35 billion. However, some regions may see a decrease in equipment spending this year, with a rebound expected in 2025. Mainland China is also expected to experience a contraction in 2025 after three consecutive years of substantial investment.

The Chinese semiconductor equipment market is thriving, driven by AI and other favorable factors. Despite an overall semiconductor equipment market performance dragged down by weak market demand, with a 2% decrease year-on-year and a 6% decrease quarter-on-quarter in the first quarter of this year, Mainland China has shown a resilient growth, with a 113% increase year-on-year in the first quarter, reaching $12.52 billion, and securing its position as the largest semiconductor equipment market globally for four consecutive quarters.