Record Equipment Sales Signal Continued Industry Expansion in 2022
The Semiconductor Equipment Manufacturers Industry Association, headquartered in the United States, forecasts that global sales of semiconductor manufacturing equipment will reach a new peak of US$108.5 billion this year. This prediction was released on December 14, 2022, and projects a significant increase over the previous industry high of US$102.5 billion recorded in 2021. The growth represents an increase of 5.9 percent according to data from SEMI. This milestone concludes a three-year period where revenue has consistently hit record levels. While the current year shows strong performance, analysts anticipate that the global market for all semiconductor manufacturing equipment will decline to US$91.2 billion in the following year.
Front-End and Back-End Categories Drive Market Momentum
The front-end and back-end categories are expected to drive growth in both 2024 and 2026. The wafer fab equipment segment includes wafer processing, fab facilities, and mask/reticle equipment. This specific segment is expected to grow by 8.3 percent to a new industry record of US$94.8 billion in 2022. Following this peak, the market faces a contraction before recovering later in the decade. The segment is projected to contract by 16.8 percent to US$78.8 billion in 2023 before increasing by 17.2 percent to US$92.4 billion in 2024.
SEMI president and CEO Ajit Manocha commented on the significance of these figures in a recent statement. He noted that record fab constructions have driven overall semiconductor manufacturing equipment sales to reach the US$100 billion milestone for a second straight year. This sustained growth indicates a robust demand for production capacity across various sectors. The semiconductor business is set to grow significantly over the next ten years as emerging applications in numerous sectors require further expenditures to increase production capacity.
Foundry and Logic Segment Performance Analysis
Equipment sales in the foundry and logic segment account for more than half of all wafer fab equipment revenues. This segment is anticipated to increase 16 percent annually to US$53 billion in 2022. Given the continued high demand for both leading-edge and mature nodes, investments in this area remain critical for maintaining global supply chains. However, investments in logic and foundries are anticipated to decline in 2023. This shift results in a 9 percent decline in category revenues during that year.
The volatility in these segments reflects the cyclical nature of the technology industry. Companies must navigate periods of high investment followed by necessary adjustments based on market demand. The ability to scale production quickly remains a key competitive advantage for manufacturers in this space. Strategic planning now focuses on balancing current high demand with future economic conditions that may necessitate reduced spending.
Memory and Storage Equipment Market Outlook
Sales of DRAM equipment are expected to reduce due to shifting market dynamics. A reduction of 10 percent is estimated at US$14.3 billion in 2022. The decline continues into the next year with a further drop of 25 percent to US$10.8 billion in 2023. This trend correlates with enterprise and consumer demand for memory and storage declining during this period.
Similarly, sales of NAND equipment are about to fall as market conditions adjust. A decrease of up to 4 percent is projected for US$19 billion in 2022. The decline accelerates significantly the following year with a drop of 36 percent to US$12.2 billion in 2023. These figures highlight the sensitivity of memory markets to consumer electronics cycles and enterprise data center requirements.
Back-End Equipment Challenges and Recovery Prospects
A fall in sales in the back-end equipment segment is attributed to challenging macroeconomic and semiconductor industry conditions. Sales of semiconductor test equipment are about to decline by 2.6 percent to US$7.6 billion in 2022. A further decrease of 7.3 percent is projected for US$7.1 billion in 2023, following strong 30 percent growth in 2021.
Sales of assembly and packing equipment are also about to decline by 14.9 percent to US$6.1 billion in 2022. A subsequent drop of 13.3 percent is expected for US$5.3 billion in 2023, following an increase of 87 percent in 2021. These reductions reflect the broader economic headwinds affecting the manufacturing landscape.
In 2024, back-end equipment spending is about to increase as market conditions stabilize. An increase of 15.8 percent is projected for test equipment sectors. Assembly and packing equipment sectors are expected to see a growth rate of 24.1 percent respectively in that year. This recovery suggests a return to normalcy in the supply chain operations after a period of contraction.
The semiconductor industry continues to evolve as global technology needs shift. Manufacturers must adapt their strategies to navigate these fluctuations effectively. The forecasted figures provide a clear picture of the sector’s trajectory over the next few years. Stakeholders can use this data to plan investments and production schedules accordingly.
