According to the most recent World Fab Forecast from SEMI, the international semiconductor business organization, China, Taiwan, South Korea, and Japan will all have more silicon manufacturing capacity than the United States by the end of 2024.
More than 80 % of the nation’s fantastic capacity is also found in Asia, according to statistics from silicon fabrication facility design, with the estimated percent this year being somewhat higher than last year.
In 2024, it is anticipated that China’s share of the global capacity will increase from 26 % to 27 %, while the United States ‘ share is still slightly below 10 % and that of Europe is under 9 %. It is improbable that US and EU efforts to rebuild their home chip supply chains will yield many fruit until at least 2025.
In 2024, the total global fab capacity is anticipated to increase by 6.4 % to surpass 30 million wafers per month ( WPM), breaking a new record. The global capacity increased 5.5 % last year to 29.6 million wafers per month, or 200mm (8-inch ) equivalents.
SEMI anticipates starting businesses at 42 fresh facilities this year, a significant increase from 11 in 2023 and 29 by 2022. The new facilities will produce wafers with diameters ranging from 300mm ( 12-inch ) for specialty applications at the large fabs run by TSMC, Samsung, Intel, and other industry leaders to 100mm ( 4″ ).
Leading-edge logic ( Intel ) and foundry ( TSMC) applications, such as high-performance computing and AI, as well as power semiconductors for electric vehicles, are driving capacity growth. The production of silicon carbide power semiconductors is currently shifting from 150mm (6-inch ) to 200mm ( 8-inch ) wafers.
This year, businesses are anticipated to start at 18 fresh factories in China, increasing the country’s capacity by 13 % to 8.6 million chips per month.
According to SEMI’s projections, fab capacity is expected to increase by 4.2 % to 5.7 million wafers per month in Taiwan, 5.4 % to 5.1 % in South Korea, 2.7 % to 4.7 % in Japan, 6.6 % to 3.0 million in the United States, and 2.7 million to 2.6 % in Europe and the Middle East ( Israel ).
Southeast Asia’s capacity is expected to increase by 4 % to 1.7 million wafers per month, bringing the total to 26 million, or 4.5 times the capacity of America and Europe put together.
By the end of 2024, it is anticipated that TSMC and other semiconductor foundries ( contract manufacturers ) will account for almost a third of total capacity, followed by integrated circuit producers like Intel and others ( just over 20 % ), discrete semiconductors ( 14 % ), DRAM ( 13 % ), NAND flash memory ( 12 % ), and analog devices ( 8 % ).
Discrete and digital power, which is driven by car electricity, is increasing at an annual rate of almost 10 %. After a difficult downturn, memory manufacturers are expected to increase their production capacity by 4 % in 2024.
The increased global focus on the strategic significance of semiconductor manufacturing to national and economic security is a key catalyst of these trends, according to SEMI president and CEO Ajit Manocha ( previously CEO of GlobalFoundries ).
What then explains the US and EU’s continued lower levels of semiconductor production and relatively slower growth, where politicians want to lessen their reliance on imports by doubling their stocks of international capacity?
One reason is that a BAE Systems shop in New Hampshire that produces electronics for fighter planes and satellites did not receive the first payment under the CHIPS Act of the Biden administration until December 2023, when it was only$ 35 million.
We’ll get into some of the bigger versions with cutting-edge fabs next month, Commerce Secretary Raimondo said. In a year, I believe we may have made 10 or 12 presentations that are related, some of which will be multi-billion dollars.
That suggests substantial raises in US potential beginning in 2025, along with the fantastic design plans of Intel, Micron, and TSMC. The Arizona lovely construction project for TSMC has been put off until next due to labor shortages and union disputes.
A court decision on the legality of the federal budget has disrupted semiconductor subsidies in Germany. Out of a total expenditure of 30 billion dollars in Magdeburg, Saxony-Anhalt, offers to Intel totaling 9.9 billion euro run the risk of an unpleasant court decision.
The FT was informed by the Saxony-Anhalt State Minister for Economic Affairs that “it would be a complete disaster for the image of Germany as an investment country because it would show that you just ca n’t rely on this country anymore.”
Germany would also be severely outmatched by Israel, the US, Taiwan, South Korea, Japan, and China, all of which are actively funding their silicon business.
Despite the ongoing conflict in Gaza, it was announced on December 26 that Israel will give Intel a$ 3.2 billion grant in the direction of the$ 25 billion building it plans to construct there.
However, China’s plan to replace semiconductor imports is failing miserably. The most cutting-edge Detector lithography systems from ASML have been prohibited from being shipped to China, but work at SMIC’s fresh 300mm fantastic in Shanghai seems set to start in the first quarter of this year.
The top Chinese foundry will construct the largest facility but, producing what are frequently referred to as “legacy” devices with 28nm and larger style rules, but a more accurate description would be “well-established mass market.”
The immediate threat to US and other international semiconductor producers is not that China will oversave the world market with 28nm chips at discounted prices, but rather that their personal sales may fall short.
China only generates about 10 % of the world’s semiconductors despite purchasing about 30 % of them. The US and other nations might discover that they are subsidizing overcapacity as that percentage increases to 20 %.
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