Mainland China is set to lead the world in equipment spending for industry mainstream 300mm semiconductor factories, with $30 billion in investments each year for the next four years, according to a forecast by U.S.-based industry group SEMI. This spending will be driven by government incentives and domestic self-sufficiency policies, with Taiwan and South Korea following behind with $28 billion and $26.3 billion in equipment spending, respectively, by 2027. These increases are part of a larger trend that is expected to see a record $137 billion in spending in 2027, driven by new AI-related applications, memory chip recovery, and strong demand for high-performance computing and automotive applications.
The rising demand for AI-related chips has led to a surge in shares for suppliers and manufacturers like Nvidia and Taiwan Semiconductor Manufacturing Co. According to SEMI President and CEO Ajit Manocha, the increase in spending on 300mm fab equipment is necessary to meet the growing demand for electronics across various markets and new applications spurred by artificial intelligence innovation. The report also highlights the influence of government support in semiconductor manufacturing, which is expected to narrow the equipment spending gap between re-emerging and emerging regions and historical top-spending regions in Asia.
China, one of the world’s largest manufacturers of electronics products, is working to reduce its reliance on foreign suppliers of chips amid strained geopolitical tensions and a focus on security by President Xi Jinping. The country has introduced guidelines to phase out purchases of chips from U.S. suppliers like Intel and AMD for government-used PCs and servers, as well as sideline Microsoft Windows and foreign databases. In the Americas, 300mm fab equipment investments are projected to double from $12 billion in 2024 to $24.7 billion in 2027, with the U.S. Commerce Department announcing a preliminary agreement to support four new Intel semiconductor manufacturing sites.
Elsewhere in the world, equipment spending in Japan, Europe & the Middle East, and Southeast Asia is expected to reach $11.4 billion, $11.2 billion, and $5.3 billion in 2027, according to SEMI. The demand for greater data throughput, crucial for AI servers, is driving strong demand for high-bandwidth memory, or HBM, and leading to increased investment in memory technology. Memory is predicted to generate $79.1 billion in equipment purchases in 2027, reflecting a 20% annual rise from 2023. Overall, the trend towards increased equipment spending in the semiconductor industry is expected to continue as demand for electronics, AI-related chips, and automotive applications grows.
With the semiconductor industry playing an increasingly important role in the global economy, government support and policies are expected to continue influencing spending and production capacity in various regions. The focus on self-sufficiency, security, and meeting growing demand for electronics and new technologies like artificial intelligence will drive investment in new equipment and manufacturing capabilities. As countries like China, Taiwan, and South Korea lead the way in equipment spending for 300mm semiconductor factories, the industry is poised for continued growth and innovation in the coming years.
