KUALA LUMPUR (June 11): Global fab equipment spending is forecast to jump 24% in 2021 to a record US$67.7 billion, said the U.S.-based Semiconductor Equipment & Materials International (SEMI).

In a statement on its website June 9, SEMI said this is 10% higher than the previously forecast US$65.7 billion.

In its second-quarter 2020 update of the SEMI World Fab Forecast report it said all product segments promising solid growth rates, according to the second-quarter 2020 update of the SEMI World Fab Forecast report.

It said memory fabs will lead worldwide semiconductor segments with US$30 billion in equipment spending, while leading-edge logic and foundry is expected to rank second with US$29 billion in investments.

SEMI said the 3D NAND memory subsegment will help power the spending spree with a 30% jump in investments this year before tacking on 17% growth in 2021.

It said DRAM fab investments will surge 50% next year after declining 11% in 2020, and fab spending on logic and foundry, mainly leading edge, will trace a similar but more muted trajectory, rising 16% 2021 after an 11% drop this year.

SEMI said some segments will see lower fab equipment spending but impressive change rates nonetheless.

It said image sensors will notch an impressive 60% increase in 2020 and add a 36% surge in 2021.

Meanwhile, analog and mixed signal will grow by 40% in 2020 and 13% in 2021.

Power-related devices are forecast to register 16 growth in 2020 with a jump of 67% in 2021.

Reviewing quarter-over-quarter spending trends in light of the Covid-19 pandemic, SEMI said global fab equipment spending declined 15% in the first quarter of 2020 – performance that was stronger than the 26% decline forecast in February.

It said that in March, some companies appeared to build up safety stock as a countermeasure to the spreading virus as shelter-in-place orders emptied offices, malls and schools worldwide.

“As the contagion grew, demand for IT and electronic products such as notebooks, game consoles and healthcare applications surged.

“Some stockpiling is expected to stretch into the second quarter, fueled by fear of restrictions – scheduled to take effect in late June – on semiconductor equipment sold to China,” it said.

However, SEMI said despite the bullish projections, threats from the pandemic still lurk.

It said pandemic-related layoffs, with more than 40 million workers idled in the United States alone (as of May), and company closures will trigger ripple effects in consumer markets and discretionary spending.

“For instance, rising unemployment will lead to falling smartphone and new car sales.

“Despite those downdrafts, digital transformation and the need to communicate will still drive industry growth as cloud services, server storage, gaming and health applications spur demand for memory and IT-related devices,” it said.