Memory Chips Will See the Largest Spending Increase in 2020: SEMI

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The USA-based semiconductor association, in its latest report, has noted that the CoronaVirus is driving the rise in global fab equipment spending. China accounts for most of the new projects

Soaring pandemic-inspired demand for chips that power everything from communications and IT infrastructures to personal computing, gaming and healthcare electronics will drive an eight per cent increase in global fab equipment spending in 2020 and a 13 per cent increase in 2021, SEMI announced in its World Fab Forecast report.

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“Rising demand for semiconductors for datacenter infrastructures and server storage along with the buildup of safety stock as U.S.-China trade tensions intensify are also contributing to this year’s growth,” read the report.

Recovering from a nine per cent decline

The bullish trend for overall fab equipment investments, as per SEMI, comes as the semiconductor industry recovers from a nine per cent decline in fab spending in 2019 and navigates a roller-coaster 2020 with actual and projected spending drops in the first and third quarters mixed with second- and fourth-quarter increases.

“Of all chip sectors, memory will see the largest spending increase in 2020, growing US$3.7 billion, or 16 per cent year-over-year (YoY), to US$26.4 billion, and tack on an 18 per cent increase to reach US$31.2 billion in 2021. 3D NAND spending will log the largest percentage surge this year, expanding 39 per cent, and register modest growth of seven per cent in 2021. DRAM is expected to see four per cent growth after a slowdown in the second half of 2020 before jumping 39 per cent percent next year,” read the report.

Equipment spending forecasts for other semiconductor sectors

Foundry, the next largest sector in equipment spending for 2020, is forecast to rise US$2.5 billion, or 12 per cent YoY, to US$23.2 billion and edge up two per cent to US$23.5 billion in 2021.

MPU equipment spending will decline US$1.2 billion, or 18 per cent, in 2020 and rise nine per cent to US$6 billion in 2021. Analog spending, as per the report, will grow a robust 48 per cent in 2020 and rise six per cent in 2021, an expansion chiefly driven by equipment investments for mixed-signal/power fabs.

Image sensors equipment spending is expected to rise four per cent to US$3 billion in 2020 and jump 11 per cent to US$3.4 billion in 2021. The SEMI World Fab Forecast report covers more than 1,300 fabs and lines and includes capacity and technology by fab and construction investments.

China accounts for the most (nine) of the new projects; followed by Taiwan at five; Southeast Asia and the Americas at two each; and Japan, Korea, and Europe/Mideast at one each. The report also tracks 18 new construction projects planned to begin next year – 10 in China, four in the Americas, three in Taiwan, and one in Europe/Mideast.

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