Semiconductor scene set for AI-led recovery in 2024, and China will be in front

That's what happens when Uncle Sam tries to curb your chip sector

Global semiconductor capacity is tipped to grow in 2024, despite the doom and gloom, with China forecast to lead the way and expand its share of global chip production as it tries to become more self sufficient.

This is the outlook from the microelectronics industry association SEMI, which includes figures for this year in its latest quarterly World Fab Forecast report. It anticipates total global wafer capacity will increase 6.4 percent during 2024 to top 30 million wafers per month (WPM) for the first time, after rising 5.5 percent to 29.6 million last year.

SEMI reckons growth this year will be driven by leading-edge logic foundries and applications including generative AI and high-performance computing (HPC), which it thinks will lead to a recovery in demand for chips.

Capacity expansion slowed in 2023 due to weakening semiconductor market demand and a resulting inventory correction – i.e. companies working through their existing stocks before placing new orders.

SEMI isn't the only market watcher making this prediction. Gartner forecast in December that the semiconductor market would return to growth this year, citing the ongoing wave of interest in AI as likely to boost demand for memory chips in particular.

SEMI foresees the DRAM sector of the market increasing in capacity by 5 percent to 4 million WPM in 2024, while 3D NAND flash is projected to rise 2 percent to 3.7 million WPM.

Discrete semiconductor capacity is touted to grow by 7 percent to 4.4 million WPM, and analog capacity is forecast to expand by 10 percent to 2.4 million WPM.

According to SEMI, China is to lead the semiconductor recovery and increase its share of global semiconductor production, despite US attempts to curb China's capabilities.

Chipmakers in China are forecast to start operating no fewer than 18 wafer fabrication projects in 2024, it says, which would result in a 13 percent capacity growth to 8.6 million WPM in 2024, following a 12 percent capacity growth to 7.6 million last year.

Taiwan is expected to retain the second largest semiconductor capacity, estimated to deliver 4.2 percent growth to 5.7 million WPM in 2024 and see five new fabrication plants begin operations this year.

Korea is ranked third with 4.9 million WPM for 2023, which SEMI expects to grow 5.4 percent this year to 5.1 million with a single additional fab coming online. Japan is expected to be in fourth with a capacity increase of 2 percent to 4.7 million WPM as it is expected to start up four additional fabrication plants this year.

Overall, the global semiconductor industry is tipped to start operations of 42 fabrication plant projects during 2024, spanning wafer sizes ranging from 100mm to 300mm, SEMI said.

On a regional basis, the Americas is calculated to increase its chip manufacturing capacity by 6 percent to 3.1 million WPM and see six new fabs in total, while SEMI expects the Europe & Middle East to grow capacity 3.6 percent to 2.7 million WPM with four new fabs coming online. ®

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