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After a slow 2023 that saw the global semiconductor market slow down in the wake of high inflation and supply chain constraints, 2024 can prove to be a good year for the sector dominated by big ticket names such as Intel, TSMC and Samsung and a commanding presence of other firms such as Micron, United Microelectronics Corporation and SK hynix.
According to SEMI.org’s World Fab Forecast report, global semiconductor capacity, as present in all chip fabrication firms’s production facilities, can cross a record 30 million wafers per month if the sudden uptick in demand for artificial intelligence (A.I.) and high performance computing (HPC) chip products continues and other segments such as NAND and DRAM also grow.
Foundries Such As TSMC, Intel & Samsung Will Account For the Biggest Portion Of 2024’s Record Wafer Production Capacity Says Report
The tail end of 2023 has been interesting when we consider the future products some of the world’s leading chip manufacturing companies will introduce. It has seen Intel, a firm on the back foot on some fronts for years, secure supplies of high NA chip manufacturing machines. These machines are made only by the Dutch firm ASML, and they are indispensable when churning out leading edge chips of the future.
Since High-NA should be unavoidable when making chips with feature sizes smaller than 2 nm, Intel’s early interest in them shows that the firm is eager to understand the system early on before it might have to rely on it for producing advanced chips after 2025. Intel and other fabs, such as TSMC can also rely on existing EUV machines to print chips belonging to 2-nm process families as well.
According to SEMI’s report, the global semiconductor industry is coupled with a growing demand for the latest machines. Overall, the global semiconductor industry is expected to grow its capacity to a cool 30 million wafers per month. This capacity growth includes the foundry companies as well as others that manufacture sensors used in electric vehicles and memory chips used in every computing system.
SEMI’s World Fab Forecast report outlines that in 2024, fabrication plants capable of working with and producing 100 mm to 300 mm wafers will open 42 new projects to account for more than half of the new volume fabs put in motion from 2022 to 2024.
The 30 million wafers per month will be made of foundries, representing a third or 10.2 million wpm, along with memory companies and products such as sensors and amplifiers used by electric vehicles.
If these estimates are met, then the total global chip manufacturing capacity will have grown to sit at an all time high just a year after the industry suffered from multiple broader slowdowns. After record-setting sales in 2021 that were somewhat carried into 2022, 2023 was a slow year as designers and manufacturers waited for inventory to clear the market and resolve the glut.
Similarly, high inflation and tighter capital conditions hindered and dissuaded companies from adding too many new chip plants to their portfolios last year. While SEMI reports that 42 new projects will enter operation this year, in 2023, only 11 new projects started producing semiconductors.
At the heart of this growth will be A.I., a broader set of data science use cases that has established a permanent foothold in the public imagination in 2023. A.I. technologies can be relied on by countless industries to improve their business operations. For instance, organizations such as banks can use them to improve customer security, firms such as pharmaceuticals can sift through copious amounts of data to develop vaccines and airlines can improve their flight path planning to reduce fuel waste and improve scheduling.