Global Semiconductor Manufacturing Sees Steady Growth in Q4 2024 Performance

Semiconductor Industry Wrap-Up: A Strong Finish to 2024

The global semiconductor manufacturing industry wrapped up 2024 with some impressive numbers, showcasing solid growth across most key segments. According to SEMI’s latest publication of the Semiconductor Manufacturing Monitor (SMM) Report, prepared in collaboration with TechInsights, the fourth quarter was particularly strong. But as we step into 2025, there’s a sense of cautious optimism. While the momentum from AI-related investments is palpable, seasonality and macroeconomic uncertainties could throw a wrench in the near-term growth plans.

Electronics Sales: A Comeback Story

After a rocky start to the year, electronics sales made a comeback, finishing the year with a 2% annual increase. The fourth quarter alone saw a 4% year-on-year growth, and while Q1 2025 is expected to dip slightly due to seasonal factors, a 1% YoY increase is still on the horizon. What’s driving this resurgence? A significant boost in integrated circuit (IC) sales, which soared by an impressive 29% YoY in Q4 2024. With the AI wave continuing to push demand for high-performance computing (HPC) and datacenter memory chips, it looks like this trend isn’t slowing down anytime soon.

Capital Expenditures on the Rise

Semiconductor capital expenditures, or CapEx, also had a rollercoaster year. After a dip in the first half of 2024, we saw a strong rebound, particularly in the fourth quarter, leading to a 3% annual growth by year-end. Memory-related CapEx was a standout performer, skyrocketing by 53% quarter-on-quarter and 56% YoY in Q4. Meanwhile, non-memory CapEx also showed signs of life, with a 19% QoQ and 17% YoY increase. Looking ahead, total CapEx is projected to remain robust in Q1 2025, bolstered by investments aimed at enhancing high bandwidth memory (HBM) capacity for AI applications.

Investments in Equipment: A Bright Spot

The semiconductor capital equipment segment is holding strong, primarily due to increased investments in leading-edge logic, advanced packaging, and HBM capacity. In Q4 2024, wafer fab equipment (WFE) spending saw a 14% YoY increase and an 8% QoQ bump. As we glance at Q1 2025, quarterly WFE billings are estimated to hover around $26 billion. Interestingly, while China’s investment has been a significant player in the WFE market, it appears to be tapering off as we close out the year.

Back-end equipment also showed promising growth in Q4 2024, with the Test segment recording a 5% QoQ increase and a staggering 55% YoY rise. The Assembly and Packaging segment wasn’t far behind, enjoying a 15% YoY increase. Both segments are expected to maintain a similar growth trajectory in Q1 2025, with predictions of 6-8% QoQ growth.

Capacity Expansion: The Numbers Speak

In a significant milestone, installed wafer fab capacity exceeded a record 42 million wafers per quarter worldwide (in 300 mm wafer equivalent) in Q4 2024, with projections suggesting it could reach nearly 42.7 million in Q1 2025. Foundry and logic-related capacity are leading the charge, growing 2.3% QoQ in Q4 and expected to rise another 2.1% in Q1 2025, thanks to ongoing capacity expansions for advanced nodes. Memory capacity also saw a modest increase of 1.1% in Q4, and it’s expected to hold steady as demand for HBM remains strong.

Looking Ahead: Cautious Optimism for 2025

Despite the looming challenges of seasonality and macroeconomic uncertainty, there’s a palpable momentum in AI-driven investments that continues to propel growth across critical segments. Clark Tseng, Senior Director of Market Intelligence at SEMI, puts it succinctly: “The industry remains cautiously optimistic, with robust growth prospects driven by ongoing demand for high-performance computing and data center buildout.”

Boris Metodiev, Director of Market Analysis at TechInsights, echoes this sentiment, predicting stronger performance in the latter half of the year. He notes that while semiconductor sales may remain flat in the first half, a notable double-digit increase is on the horizon. However, inventory challenges for discrete, analog, and optoelectronic manufacturers need to be addressed before we can expect widespread growth to resume.

Stay Informed with the SMM Report

For those keen to keep their finger on the pulse of the semiconductor manufacturing landscape, the Semiconductor Manufacturing Monitor (SMM) report is a treasure trove of insights. It provides comprehensive data on everything from capital equipment and fab capacity to semiconductor and electronics sales, along with forecasts for the capital equipment market. With two years of quarterly data and an outlook for the semiconductor supply chain, subscribing to the SMM report is a smart move for anyone looking to navigate this dynamic industry.

Technology Explained

---

Foundry: A foundry is a dedicated manufacturing facility focused on producing semiconductor components like integrated circuits (ICs) for external clients. These foundries are pivotal in the semiconductor industry, providing diverse manufacturing processes and technologies to create chips based on designs from fabless semiconductor firms or other customers. This setup empowers companies to concentrate on innovative design without needing substantial investments in manufacturing infrastructure. Some well-known foundries include TSMC (Taiwan Semiconductor Manufacturing Company), Samsung Foundry, GlobalFoundries, and UMC (United Microelectronics Corporation).

Latest Articles about Foundry

---

HPC: HPC, or High Performance Computing, is a type of technology that allows computers to perform complex calculations and process large amounts of data at incredibly high speeds. This is achieved through the use of specialized hardware and software, such as supercomputers and parallel processing techniques. In the computer industry, HPC has a wide range of applications, from weather forecasting and scientific research to financial modeling and artificial intelligence. It enables researchers and businesses to tackle complex problems and analyze vast amounts of data in a fraction of the time it would take with traditional computing methods. HPC has revolutionized the way we approach data analysis and has opened up new possibilities for innovation and discovery in various fields.

Latest Articles about HPC