"Increased Semiconductor Facility Investment and Rising Operating Rates... AI Will Become a Massive Catalyst"

International Semiconductor Equipment and Materials Association (SEMI) Announcement
Q1 Memory Sector Facility Investment Up 10%
Fab Utilization Rate Rises 70%... Production Capacity Also Expanded

This year, the global semiconductor manufacturing industry is expected to overcome the sluggish market conditions and show a full-fledged recovery trend. It is anticipated that from the first quarter, the scale of capital investment will increase and fab (factory) utilization rates will follow an upward curve. There is also a forecast that artificial intelligence (AI) technology will become a huge catalyst driving demand for cutting-edge semiconductors.

[Image source=Pixabay]

The Semiconductor Equipment and Materials International (SEMI) announced this on the 21st based on the latest data from the 'Semiconductor Manufacturing Monitoring Report,' published jointly with the semiconductor market research firm TechInsights.

Capital investment in the memory semiconductor sector in the first quarter is expected to increase by 9% compared to the previous quarter and by 10% compared to the same period last year. Capital investment in the non-memory semiconductor sector is expected to rise by 16% compared to the previous quarter. However, SEMI explained that the scale may decrease compared to the same period last year.

Fab utilization rates are expected to continue their upward trend, rising from 66% in the fourth quarter of last year to 70% in the first quarter of this year. Fab production capacity increased by 1.3% in the fourth quarter of last year and is expected to expand by a similar figure in the first quarter. Although equipment investment exceeded expectations last year, it may significantly decrease in the first half of this year due to the usual off-season effect.

Regarding sales of electronic products and integrated circuits (ICs), there was a 1% increase in the fourth quarter of last year compared to the same period the previous year, marking the first growth since the second half of 2022. Sales are also expected to increase by 3% in the first quarter compared to the same period last year. IC sales grew by 10% year-over-year in the third quarter of last year, and are projected to increase by 18% in the first quarter.

Boris Metodiev, Director at TechInsights, stated, "While the overall IC market is growing this year, growth in automotive and industrial semiconductors is slowing, which is constraining growth in the analog semiconductor market. However, artificial intelligence (AI) technology is expected to be a huge catalyst driving demand for cutting-edge semiconductors."