KUALA LUMPUR (Jan 12): Global fab equipment spending for front end facilities is expected to rise 10% year-over-year (y-o-y) in 2022 to a new all-time high of over US$98 billion (RM409.8 billion), marking a third consecutive year of growth.

In its quarterly World Fab Forecast report released on Tuesday (Jan 11), the US-based Semiconductor Equipment and Materials International (SEMI) said the fab equipment spending increase in 2022 would follow a 39% jump in 2021 and 17% in 2020.

It said the industry last saw three consecutive years of growth from 2016 to 2018, more than 20 years after logging a three-year run in the mid-1990s.

SEMI President and CEO Ajit Manocha said the semiconductor equipment industry has enjoyed a period of unprecedented growth with increased spending in six of the past seven years, as chipmakers expand capacity to meet secular demand for a wide range of emerging technologies including artificial intelligence, autonomous machines and quantum computing.

“The capacity buildout extends beyond the robust demand during the pandemic for electronics vital for remote work and learning, telehealth and other applications,” he said.

Sector

SEMI said the foundry sector is expected to account for 46% of total spending in 2022, a 13% y-o-y increase, followed by memory at 37%, a slight dip from 2021.

In memory segments, it said spending for dynamic random-access memory is forecast to decline while expenditures for 3D NAND will edge higher.

Microcontroller (with memory protection unit) spending is expected to register a staggering 47% surge in 2022. Power-related devices are also projected to show strong growth of 33%.

Spending by region

SEMI also added that South Korea is expected to rank at the top of equipment spending, followed by Taiwan and China, combining to account for 73% of all fab equipment spending in 2022.

It said after a dramatic increase in 2021, fab equipment spending in Taiwan is expected to rise at least 14% this year.

Spending in South Korea also showed a sharp increase in 2021 and is projected to climb 14% in 2022. China is expected to decrease spending by 20%.

Europe/Mideast, the next largest spending region in 2022, is projected to see a remarkable 145% growth for the year. Japan is expected to grow by 29%.