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AI chips and storage to drive 20% growth in global semiconductor revenue

 

     global semiconductor revenue will grow by 20% this year, mainly driven by the artificial intelligence (AI) chip and storage market. Next year, semiconductor revenue is expected to grow by another 20% as demand in the communications, industrial and automotive sectors recovers.

SEMI Senior Director of Industry Research, Clark Tseng, noted that electronic device sales were flat compared to last year in the first half, with a forecasted 4% year-over-year increase in the third quarter and an annual increase of 3% to 5%, slightly below previous estimates.

Semiconductor revenue grew more than 20% year-over-year in the first half. Besides storage, AI chips are also a major growth driver. Excluding storage, semiconductor revenue is expected to grow by about 10%, and if AI chips are also excluded, the growth will only be 3%.

Clark Tseng stated that with inventories in the communications, industrial, and automotive sectors nearing low points, demand is expected to recover healthily next year, potentially leading to a 20% revenue increase. He predicts that wafer fab capacity utilization bottomed out in the first quarter of this year, began to recover in the second quarter, and is expected to reach 70% in the third quarter, with further improvement in the fourth quarter.

This year, China's semiconductor investment surged 90% in the first half, mainly due to concerns about potential stricter U.S. regulations and efforts to build sufficient mature process capacity. Investments in other countries mostly decreased. SEMI forecasts a slight 3% increase in the global semiconductor equipment market this year, reaching $109.5 billion, with a 16% increase next year, driven by advanced logic chips and packaging and testing, reaching $127.5 billion.

The U.S. semiconductor equipment expenditure is expected to grow at a compound annual growth rate (CAGR) of 22% from 2023 to 2027, Europe and the Middle East at 19%, Japan at 18%, South Korea at 13%, Taiwan at around 9%, and Mainland China may experience negative growth. For silicon wafers, it is expected that shipments will increase gradually in the second half of this year, but the total shipment volume for the year may decrease by 3%, with a potential recovery next year.

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