For workers and families across the global electronics supply chain, the semiconductor industry’s latest forecast signals both opportunity and uncertainty. The Semiconductor Equipment Manufacturers Industry, based in the US, predicts that global sales of all semiconductor manufacturing equipment by original equipment manufacturers would hit a new high of US$108.5bil in 2022, according to SEMI. This record-breaking figure directly affects the livelihoods of engineers, factory workers, and communities in regions like PETALING JAYA, where semiconductor manufacturing supports thousands of jobs.
Record Sales and Future Declines
The prediction exceeds the previous industry high of US$102.5 billion in 2021 by 5.9%. According to SEMI, the record high ends three years of record revenue. The front-end and back-end categories will likely drive growth in both 2024 and 2026. However, the global market for all semiconductor manufacturing equipment is predicted to decline to US$91.2 billion next year, a shift that could ripple through local economies dependent on chip production.
SEMI president and CEO Ajit Manocha said in a statement that “record fab constructions have driven overall semiconductor manufacturing equipment sales to reach the US$100bil milestone for a second straight year.” The semiconductor business is to grow significantly over the next ten years. As a result of emerging applications in numerous sectors, which will require further expenditures to increase production capacity.
Equipment Segments and Investment Trends
According to SEMI, the wafer fab equipment segment includes wafer processing, fab facilities, and mask/reticle equipment. It is expected to grow by 8.3% to a new industry record of US$94.8 billion in 2022. Then contract by 16.8% to US$78.8 billion in 2023 before increasing by 17.2% to US$92.4 billion in 2024. Given the continued high demand for both leading-edge and mature nodes, equipment sales in the foundry and logic segment. Which account for more than half of all wafer fab equipment revenues. Anticipated to increase 16% annually to US$53bil in 2022. Investments in logic and foundries are anticipated to decline in 2023. Which result in a 9% decline in category revenues.
Sales of DRAM equipment are about to reduce. Reduce By 10% estimated US$14.3 billion in 2022 and 25% to US$10.8 billion in 2023. As enterprise and consumer demand for memory and storage declines. While sales of NAND equipment are about to fall. Fall Upto 4% to US$19 billion in 2022 and 36% in 2023, following strong 30% growth in 2021. Sales of assembly and packing equipment are about to decline. Decline by 14.9% to US$6.1 billion in 2022 and by 13.3% to US$5.3 billion in 2023. Following an increase of 87% in 2021. In 2024, back-end equipment spending is about to increase. Increase by 15.8% and 24.1%, respectively, in the sectors of test equipment and assembly and packing equipment.
What to Watch Next
Looking ahead, the industry’s trajectory hinges on how quickly demand rebounds for memory and logic chips, as well as the pace of new fab construction. Investors and policymakers will closely monitor whether the anticipated 2024 recovery in equipment sales materializes, particularly in the assembly and packing segments. The Semiconductor Equipment Manufacturers Industry’s next update from SEMI will provide crucial data on whether the current downturn is a temporary correction or the start of a longer cycle, with implications for workers and communities from PETALING JAYA to Silicon Valley.
