The global semiconductor manufacturing industry is anticipated to increase capacity by 6% in 2024 and 7% in 2025 to accommodate the unrelenting growth in chip demand.
This has resulted in a record high of 33.7 million 8-inch equivalent wafers per month (wpm), according to SEMI's most recent quarterly report. Leading-edge capacity for 5nm nodes and below is expected to increase by 13% in 2024, driven mostly by generative artificial intelligence (AI) for data center training, inference, and leading-edge devices, SEMI said.
To improve processing power efficiency, chip vendors including Intel, Samsung, and TSMC are gearing up for the manufacture of 2nm Gate-All-Around (GAA) processors. This will boost total leading-edge capacity by 17% in 2025, SEMI indicated.
"The proliferation of AI processing, from cloud computing to edge devices, is fueling the race to develop high-performance chips and driving a robust expansion of global semiconductor manufacturing capacity," said Ajit Manocha, SEMI president and CEO. "This creates a virtuous cycle: AI will drive the growth of semiconductor content across a diverse range of applications, which in turn encourages further investment."
Chinese chipmakers rapidly expand fab capacity
Chinese chipmakers are expected to maintain double-digit capacity growth, registering a 14% increase to 10.1 million wpm in 2025 – nearly a third of the industry's total – after logging a 15% rise to 8.85 million wpm in 2024. Despite the potential risks of an overshoot, the region continues aggressive investment in its capacity expansion, in part to mitigate the impact of recent export controls. Major foundry suppliers including Huahong Group, Nexchip, Sien Integrated and SMIC, and DRAM maker CXMT are investing heavily to grow the region's semiconductor manufacturing capacity.
Most of the other major chipmaking regions are expected to see capacity growth of no more than 5% in 2025. Taiwan is forecast to rank second in capacity in 2025 at 5.8 million wpm, a 4% growth rate, while South Korea is projected to take the third spot next year, expanding capacity by 7% to 5.4 million wpm after surpassing the 5 million wpm mark for the first time in 2024.
Foundry, HBM drive capacity growth
Fueled largely by Intel's establishment of its foundry business and China's capacity expansion, the foundry segment is projected to increase capacity 11% in 2024 and 10% in 2025, reaching 12.7 million wpm by 2026.
The rapid adoption of High Bandwidth Memory (HBM) to meet the rising demand for faster processors required by AI servers is powering unprecedented capacity growth in the memory sector. Exploding AI adoption has driven increasing demand for denser HBM stacks, with each stack now integrating 8 to 12 dice.
In response, leading DRAM makers are increasing investment in HBM/DRAM. DRAM capacity is expected to increase by 9% in 2024 and 2025. By contrast, the 3D NAND market recovery remains slow, with no growth in capacity forecast for 2024 and a 5% increase expected in 2025.
The rise of AI applications in edge devices is expected to increase DRAM content in mainstream smartphones from 8GB to 12GB, while laptops using AI assistants will need at least 16GB of DRAM. The expansion of AI to edge devices will also stoke demand for DRAM.
