June 15, 2022 Anne-Françoise Pelé
Global fab equipment spending for front-end facilities is set to reach an all-time-high in 2022.
While the chip shortage is expected to continue through 2022 and possibly 2023, global spending on front-end fab equipment is set to reach a record high in 2022, according to SEMI’s latest World Fab Forecast report.
Global trends
Global fab equipment spending is expected to mark the third consecutive year of growth. SEMI even raised its year-over-year growth forecast for global fab equipment for front-end facilities from US$98 billion (+10%) in January 2022 to US$109 billion (+20%) today for the year 2022.
“The global semiconductor equipment industry remains on track to cross the US$100 billion threshold for the first time, as shown in our latest update of the World Fab Forecast,” said Ajit Manocha, president and CEO of SEMI, in a statement. “This historic milestone puts an exclamation point on the current run of unprecedented industry growth.”
The increase in fab equipment spending in 2022 would follow a 39% jump in 2021 and 17% in 2020, SEMI reported in January. The sector last saw three consecutive years of growth from 2016 to 2018, more than 20 years after a three-year run in the mid-1990s.
Regional trends
Apart from China, the upward momentum is reflected around the world.
Asia
Taiwan is expected to lead the way in manufacturing equipment spending in 2022, with a 52% increase in investment over the previous year to US$34 billion. Korea is next with US$25.5 billion, up 7%, and China with US$17 billion, down 14% from last year’s peak.
According to SEMI, Taiwan, Korea, and Southeast Asia are expected to see record investments in 2023.
In January, SEMI analysts had drawn a different trajectory. At the time, they expected Korea to lead in equipment spending, followed by Taiwan and China, and together accounting for 73% of all fab equipment spending in 2022.
When asked for clarification, Michael Hall, marketing communications manager at SEMI, told EE Times Europe, “As the year progresses, analysts update their forecasts based upon the information provided in earnings announcements.” He specified, “Companies based in Taiwan came out with more bullish projections, moving the region into the top position.”
The Europe and Middle East
The Europe and Middle East region is expected to record US$9.3 billion in spending this year. While comparatively lower than other regions, SEMI said its investments would represent a “staggering” 176% growth over the previous year. For comparison, SEMI’s January report indicated an annual growth of 145% in the region.
Americas
Fab equipment spending in the Americas is expected to reach US$9.3 billion in 2023, up 13% year over year after a 19% year-over-year increase in 2022. The region will maintain its fourth place in global fab equipment spending in both years.
SEMI’s June World Fab Forecast report lists more than 1,400 facilities and production lines worldwide. More than 85% of capital spending in 2022 will come from increasing the capacity of 158 fabs and production lines, a proportion that is expected to fall to 83% next year when 129 known fabs and lines increase their capacity.
Focus on Europe
According to consulting firm Kearney, Europe’s share in global chip manufacturing has dropped from 25% in 2000 to 8% today. An even more drastic decline has occurred in advanced semiconductor technology, with Europe’s market share falling from 19% in 2000 to 0% today.
Unveiled in February 2022, the Chips Act will mobilize €43 billion of public and private investments and set measures to prevent, prepare, anticipate, and swiftly respond to any future supply disruption, together with member states and international partners. It aims to double Europe’s share of global semiconductor production to 20% by 2030.
In recent months, several fab construction or expansion projects have been completed or launched in Europe.
In September 2021, Infineon Technologies inaugurated a €1.6 billion chip factory for power electronics on 300-mm thin wafers in Villach, Austria.
In November, Bosch announced plans to invest more than €400 million in expanding its wafer manufacturing fabs in Dresden and Reutlingen, Germany, and in its chip testing operations in Penang, Malaysia. Most of the capital expenditure is for Bosch’s 300-mm wafer fab in Dresden, where manufacturing capacity is expected to ramp up this year.
In March, Intel’s investment plan for Europe was unveiled. The U.S. semiconductor giant announced it will invest €17 billion to build two semiconductor megafabs in Magdeburg, Germany. The fabs are expected to deliver chips using Intel’s Angstrom-era transistor technologies, serving the needs of both foundry customers and Intel for Europe and globally as part of the company’s integrated device manufacturer (IDM) 2.0 strategy.
Also in March, French silicon-on-insulator (SOI) wafer supplier Soitec announced a new facility at its headquarters in Bernin, France, primarily to produce silicon carbide wafers. The extension will also support the company’s 300-mm SOI activities.
In May 2022, Okmetic, a Finnish manufacturer of silicon wafers for MEMS, sensor, RF, and power devices, unveiled its plans to more than double its current production capacity by building a new silicon wafer fab at its headquarters in Vantaa, Finland. Production is expected to start in 2025.
At the recent Industry Strategy Symposium (ISS) 2022 in Brussels, Laith Altimime, president of SEMI Europe, politely expressed the frustration that the industry association representing the entire electronics manufacturing and design supply chain in Europe felt about the lack of granularity in the details of the European Chips Act.
Source: https://www.eetimes.eu/europe-middle-east-fab-equipment-spending-to-grow-176-in-2022/