Recently, the "Semiconductor Manufacturing Monitoring (SMM) Report Q4 2024" jointly released by the International Semiconductor Industry Association (SEMI) and TechInsights shows that the global semiconductor manufacturing industry ended the fourth quarter of 2024 with solid year-on-year growth in most key areas. However, due to seasonal factors and macroeconomic uncertainties, the industry will still face certain challenges in the opening stage of 2025, and the overall outlook is cautiously optimistic.
Looking at electronics sales figures, the market performed sluggishly in the first half of 2024, but then bottomed out, with full-year sales up 2%. In the fourth quarter of 2024, electronics sales increased by 4% year-over-year. Due to seasonality, sales are expected to grow by only 1% year-over-year in the first quarter of 2025. The integrated circuit (IC) market is showing even stronger growth, with IC sales up a significant 29% year-over-year in the fourth quarter of 2024. IC sales are expected to continue to grow 23% year-over-year in the first quarter of 2025 due to continued strong demand for AI-driven high-performance computing (HPC) and data center memory chips.
The semiconductor industry's capital expenditure (CapEx) has also experienced a downward trend in 2024. Spending declined in the first half of the year, but rebounded strongly in the second half of the year, especially in the fourth quarter, driving full-year capex growth of 3%. Among them, memory-related capex growth was particularly prominent, with a 53% quarter-on-quarter increase and a 56% year-on-year increase in the fourth quarter of 2024; Capex in the non-memory segment also rose, up 19% sequentially and 17% year-over-year. Total capital expenditure is expected to remain strong at 16% year-over-year in the first quarter of 2025 as investments continue to increase to meet the demand for high-bandwidth memory (HBM) capacity expansion for AI deployments.
Chart: The global semiconductor manufacturing industry has achieved outstanding results in Q4 2024
Resilient performance in the semiconductor capital equipment sector. Wafer fabrication equipment (WFE) spending increased 14% year-over-year and 8% sequentially in Q4 2024, driven by increased investments in leading-edge logic, advanced packaging, and HBM capacity expansion. In the first quarter of 2025, WFE quarterly bills are expected to remain around $26 billion. Chinese investment in the WFE market is still significant, although it cooled by the end of 2024. In addition, the back-end equipment market also saw significant growth in the fourth quarter of 2024, with the test segment growing 5% quarter-on-quarter and up to 55% year-over-year; The Assembly & Packaging segment grew 15% year-over-year. In the first quarter of 2025, the quarter-on-quarter growth rate of these two divisions is expected to remain between 6 - 8%.
In terms of capacity, global fab installed capacity broke the all-time record of 42 million pieces per quarter (300mm wafer equivalent) in the fourth quarter of 2024, and is expected to climb further to nearly 42.7 million pieces in the first quarter of 2025. Among them, foundry and logic-related capacity growth momentum is strong, with a sequential increase of 2.3% in the fourth quarter of 2024, and is expected to continue to grow by 2.1% in the first quarter of 2025, driven by the expansion of advanced process capacity. Memory capacity increased by 1.1% in the fourth quarter of 2024 and is expected to remain stable in the first quarter of 2025 due to strong demand from HBM.
Clark Tseng, senior director of market intelligence at SEMI, said: "Despite the challenges posed by seasonality and macroeconomic uncertainty, the AI-driven investment boom is driving expansion in key areas such as memory, capex and wafer fabrication equipment. Looking ahead to 2025, the continued demand for high-performance computing and the advancement of data center construction will bring solid growth prospects to the industry.”
Boris Metodiev, Director of Market Analysis at TechInsights, said: "At the beginning of the year, we expected the industry to perform better in the second half of the year. Semiconductor sales are expected to remain flat in the first half of the year and significant double-digit growth in the second half of the year. However, manufacturers of discrete, analog, and optoelectronic devices still face inventory issues, and only by addressing these issues can the industry expect to fully return to growth.”
