Semiconductor equipment market set to reach new highs

17 Mar 2021

Industry group SEMI predicts three straight years of record-breaking sales, with spending expected to top $80BN in 2022.

Sustained upswing

Boosted by the global response to the coronavirus pandemic, spending on equipment needed to manufacture semiconductor chips will hit record levels both this year and in 2022.

According to the Semiconductor Equipment and Materials International (SEMI) industry representative body, fab equipment spending of around $64 billion in 2020 - itself a record total - will rise to $74 billion this year.

And although the rate of growth is expected to slow a little in 2022, spending is still forecast to rise to about $83 billion. If that proves correct, it would mean that the market for semiconductor capital equipment had more than doubled from the 2016 total.

Much of that equipment relies on lasers and other optics and photonics technology, notably lithography systems used to pattern silicon wafers that already account for at least $10 billion of annual fab spending.

Component surge
“Explosive demand for electronics that are the backbone of communications, computing, healthcare, and online services - sectors that mounted robust responses to the Covid-19 outbreak as the world rallied to curb the coronavirus’s spread - account for much of the spending,” noted SEMI.

Its current prediction anticipates three straight years of strong growth since the most recent downturn, a 7 per cent slump recorded in 2019. A four-year growth streak has not been seen since the mid-1990s.

“The bulk of fab investments in 2021 and 2022 will be seen in the foundry and the memory sectors,” reported the industry group. “Driven by leading edge investment, foundry spending is expected to grow 23 per cent in 2021, reach $32 billion and flatten in 2022.

“Overall memory spending will increase in the single digits to reach $28 billion in 2021 while DRAM will surpass NAND Flash, and then surge by 26 per cent in 2022 on the strength of both DRAM and 3D NAND investment.”

Investment in planned production of power and microprocessor components will also boom over the forecast period. Fab spending on power semiconductor devices is expected to expand by 46 per cent this year and by 26 per cent in 2022.

Investment in equipment needed for microprocessor device production is forecast to jump by 40 per cent in 2022.