After a challenging 2023, the global semiconductor industry is finally showing signs of recovery in the first half of 2024. As market demand rebounds, major wafer fabs are ramping up capital expenditures and expanding their capacities to prepare for a new growth peak.
According to a report by JPMorgan Securities, the inventory reduction phase for wafer foundries is nearing its end. The continuous rise in AI demand and the gradual recovery of non-AI demand indicate that the wafer foundry industry is on the path to recovery.
In particular, China's wafer foundry sector is seeing a rapid recovery in capacity utilization, and local IC design companies are normalizing their inventory adjustments.
Leading companies in the industry, such as TSMC, Samsung, SK Hynix, and Micron, have started increasing their capital expenditures and expanding their capacities. TSMC plans to raise its capital expenditure to between $32 billion and $36 billion by 2025 to meet the strong demand for its 2nm process technology. Similarly, Samsung and SK Hynix are raising funds in South Korea to significantly expand their production capacities by 2025.
Micron also plans to increase its capital expenditure to approximately $12 billion in fiscal year 2025 to support new technologies and facility upgrades.
According to SEMI, global wafer fab equipment spending is expected to grow by 21% year-on-year in 2024, reaching $92 billion. Taiwan, South Korea, and China are expected to continue leading in equipment spending.
