The global semiconductor manufacturing industry in the third quarter of 2024 showed “strong” momentum with all key industry indicators performing positive quarter-on-quarter (QoQ) increases for the first time in two years.
The findings are reported in SEMI’s Q3 2024 publication of the Semiconductor Manufacturing Monitor (SMM) Report, prepared in partnership with TechInsights.
The growth is fueled by seasonal factors and strong demand from investments in AI data centers, however, the consumer, automotive, and industrial segments are experiencing a slower pace of recovery. The growth trend is expected to continue into the fourth quarter of 2024.
After declining in the first half of 2024, electronic sales rebounded in Q3 2024, growing 8 percent QoQ, with a projected QoQ increase of 20 percent in Q4 2024. IC sales also rose by 12 percent QoQ in Q3 2024 and are expected to grow another 10 percent in Q4 2024.
Overall, IC sales are forecasted to increase over 20 percent in 2024, primarily driven by memory products due to price improvement across the board and strong demand for data center memory chips.
Similar to the electronics sales, semiconductor capital expenditures (CapEx) decreased in the first half of 2024, but the trend is turning positive starting in Q3 2024.
Memory-related CapEx is surging 34 percent QoQ and 67 percent year-on-year (YoY) in Q3 2024 reflecting improvement in the memory IC market compared to the same period of the last year.
In Q4 2024, total CapEx is expected to jump 27 percent relative to Q3 2024 levels and 31 percent YoY, with memory-related CapEx leading this growth at 39 percent YoY.
The semiconductor capital equipment segment remains strong and is performing better than previously expected due to substantial investments from China and increased spending for high-bandwidth memory and advanced packaging.
Wafer Fab Equipment (WFE) spending increased 15 percent YoY and 11 percent QoQ in Q3 2024. China’s investment continues to play a significant role in the WFE market.
Additionally, both the Test and the Assembly and Packaging segments experienced impressive YoY increases of 40 percent and 31 percent, respectively, in Q3 2024, and this growth is anticipated to continue for the remainder of the year.
In Q3 2024, installed wafer fab capacity reached 41.4 million wafers per quarter (in 300mm wafer equivalent) and is projected to rise by 1.6% in Q4 2024.
Foundry and Logic-related capacity continues to show stronger increases, growing 2.0 percent in Q3 2024 and is projected to rise 2.2 percent in Q4 2024 driven by capacity expansion for both advanced and mature nodes.
Memory capacity increased 0.6 percent in Q3 2024 and is forecasted to maintain the same pace of growth in Q4 2024. This growth is driven by strong demand for high bandwidth memory (HBM) but is partially offset by process node transitions.
Clark Tseng, senior director of market intelligence at SEMI, says: “The semiconductor capital equipment segment continues to exhibit growth momentum, bolstered this year by strong investments from China and increased spending on advanced technologies.
“Additionally, the continued expansion of fab capacity, especially in the foundry and logic segments, underscores the industry’s commitment to meeting the growing demand for advanced semiconductor technologies.”
Boris Metodiev, director of market analysis at TechInsights, says: “2024 has shown two sides within the semiconductor industry.
“While consumer, automotive, and industrial markets have struggled, AI has thrived, boosting average selling prices in memory and logic products.
“As interest rates decrease heading into 2025, consumer sentiment is expected to improve, encouraging larger purchases and supporting both the consumer and automotive markets.”
