China’s Semiconductor Fab Investments Projected to Hit $110 Billion by 2025

A Growing Investment Landscape for Fab Equipment

Get ready for some exciting news in the world of semiconductor manufacturing! According to SEMI’s latest quarterly World Fab Forecast report, global spending on fab equipment for front-end facilities is set to rise by 2% year-over-year in 2025, hitting a whopping $110 billion. This marks the sixth straight year of growth since 2020—a trend that’s hard to ignore. But hold on, it gets even better: spending is projected to jump by 18% in 2026, soaring to an impressive $130 billion. So, what’s fueling this surge? It’s a mix of factors, including the booming demand for high-performance computing (HPC) and memory sectors, all while artificial intelligence (AI) is ramping up the silicon needs for edge devices.

Ajit Manocha, SEMI’s President and CEO, put it perfectly: “The global semiconductor industry’s investments in fab equipment have been edging up for six straight years, and spending is poised to see a strong 18% increase in 2026 as production ramps to meet booming AI-related chip demand.” This forecast isn’t just about numbers; it signals a pressing need for workforce development initiatives in 2025 and 2026 to ensure we have the skilled workers ready for the approximately 50 new fabs expected to come online during this period. It’s a call to action for the industry!

Logic & Micro: The Power Players

When we talk about growth in fab investments, the Logic & Micro segment is stepping into the spotlight. Why? Because it’s driven by technologies like the 2-nanometer process and backside power delivery technology, which are anticipated to kick off production by 2026. This segment is projected to see an 11% boost in investments, reaching $52 billion in 2025, followed by an even more robust 14% increase to $59 billion in 2026. Can you imagine the innovation that will come from these advancements?

Memory segment spending isn’t sitting idly by either. It’s expected to grow steadily over the next two years, inching up by 2% to hit $32 billion in 2025, with an impressive forecast of 27% growth in 2026. While the DRAM segment might see a slight dip of 6% to $21 billion in 2025, it’s set to bounce back with a 19% increase to $25 billion in 2026. On the other hand, the NAND segment is gearing up for a strong comeback, projected to rise by 54% year-over-year to $10 billion in 2025, and then continue climbing by 47% to $15 billion in 2026. Talk about a rollercoaster ride!

China: Still the Leader, but With Shifts

China continues to hold the crown for global semiconductor equipment spending, even as it faces a decline from its peak of $50 billion in 2024. Projections for 2025 show spending at $38 billion, reflecting a 24% year-over-year decrease. By 2026, spending is expected to dip further, hitting $36 billion. But don’t count China out just yet; it’s still leading the pack.

Meanwhile, Korean chipmakers are gearing up for a surge in investment, thanks to the growing penetration of AI technology. They’re planning to invest significantly in equipment for capacity expansion and tech upgrades, positioning the region as the second-highest spender through 2026. Forecasts suggest a 29% increase to $21.5 billion in 2025, followed by a 26% jump to $27 billion in 2026.

Taiwan and the Americas: The Rising Contenders

Taiwan is also making waves, aiming to solidify its leadership in advanced technology and production capabilities. The island is projected to spend $21 billion in 2025 and $24.5 billion in 2026, all in response to the rising demand for AI applications across cloud services and edge devices. It’s a strategic move that could pay off big time.

The Americas aren’t lagging either, with expected spending of $14 billion in 2025 and $20 billion in 2026. Japan, Europe and the Middle East, and Southeast Asia follow closely behind, with projected spending of $14 billion, $9 billion, and $4 billion in 2025, and $11 billion, $7 billion, and $4 billion in 2026, respectively.

A Bright Future Ahead

The latest SEMI World Fab Forecast report, published in March, highlights a vibrant landscape with more than 1,500 facilities and lines globally. Among these, 156 facilities and lines are expected to start operations in 2025 or later. As we look ahead, it’s clear that the semiconductor industry is on a growth trajectory that promises to reshape the tech landscape. Are you ready for what’s next?

Technology Explained

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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.

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NAND: NAND technology is a type of non-volatile memory that is used in many computer applications. It is a type of flash memory that is used to store data in a non-volatile manner, meaning that the data is not lost when the power is turned off. NAND technology is used in many computer applications, such as solid-state drives, USB flash drives, digital cameras, and memory cards. It is also used in many embedded systems, such as cell phones, tablets, and other consumer electronics. NAND technology is a reliable and cost-effective way to store data, making it a popular choice for many computer applications.

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