Fab equipment spend to set record in 2021, forecast shows

Samsung Austin Semiconductor
Semiconductor fabrication equipment spending should reach record levels in 2021 following a downturn due to COVID-19 impacts. (Samsung)

Even though COVID-19 has taken a toll on spending for semiconductor fabrication equipment, the downward trend is expected to reverse in Q3, according to a recent forecast by SEMI.

The second quarter 2020 update of SEMI’s World Fab Forecast, released Tuesday, also predicts global fab equipment spending to reach a record level in 2021 of $67.7 billion.

The forecast is tabulated using capital spending plans and technology roadmaps of more than 1,000 semiconductor fabrication facilities globally.

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Tracking of fab equipment spending is widely considered a leading indicator of the entire semiconductor market, which in turn helps predict the amount of finished electronics goods like laptops and smartphones that are produced.

The report shows that fab equipment spending dropped 8% in 2019 and is expected to drop another 4% in 2020.  However, 2021 is expected to be up by 24% over 2020.

fab equipment spending chart

Memory fabs will make up $30 billion of the $67 billion in 2021, while logic will rank second with $29 billion in investments.  For all of 2020, spending will be about $54 billion, then increase 24% to $67 billion in 2021.

The 3D NAND memory segment will see an increase of 30% in investments in 2020 and then tack on 17% growth in 2021.  DRAM will decline 11% this year, then surge 50% next year.  Logic and foundry will also drop 11% this year and rise 16% in 2021.

SEMI’s forecast also found that there will be lower fab equipment spending on image sensors, although the rate of change will increase by 60% in 2020 and another 36% in 2021.  Analog and mixed signal will grow by 40 % in 2020 and 13 % in 2021.  Power related devices will see 16% growth in 2020 with 67% growth in 2021.

Because of COVID-19, equipment spending dropped 15% in Q1.  The forecast also noted that threats from the pandemic still lurk, with high unemployment leading to a reduction in discretionary spending on cars and electronics such as smartphones. Cloud services, server storage and health applications will drive demand for memory and IT-related services, the forecast said.

RELATED: Forecasters see “gloomy” demand for semi wafers with COVID-19

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