SEMI: Semiconductor equipment will grow significantly and hit a record high of $70 billion next year

The semiconductor industry is a high-tech industry that is advancing rapidly. Each generation of products requires a new generation of technology, and each generation of technology requires a new generation of equipment. As China, the United States, and South Korea invest heavily in semiconductor process technology, the sales amount of semiconductor equipment has been rising year by year.

Recently, the International Semiconductor Industry Association SEMI estimated that global OEM semiconductor manufacturing equipment sales will reach US$63.2 billion in 2020, a 6% increase from US$59.6 billion in 2019. Revenue in 2021 will show strong double-digit growth, setting a historical record of US$70 billion.

From a regional perspective, China, Taiwan, and South Korea are the top three leading markets for equipment spending in 2020 and 2021. Driven by strong spending in foundry and memory, mainland China and overseas semiconductor manufacturers have jumped to the top of total semiconductor equipment spending in 2020 and 2021; Taiwan's equipment spending this year will be slightly revised after a sharp increase of 68% in 2019, and is expected to rebound by 10% in 2021, making Taiwan firmly the second largest equipment investment region; South Korea will surpass its performance in 2019 and rank third in semiconductor equipment investment in 2020, making the region the third largest spender in 2020. South Korea's equipment spending is expected to grow 30% in 2021, fueled by a recovery in memory investment. Most other regions have the opportunity to show growth in 2020 or 2021.

Image source: Bloomberg

SEMI said that this wave of spending strength was driven by the growth of multiple semiconductor industry categories. Among them, wafer fab equipment (including wafer processing, wafer fab facilities and mask equipment) is expected to grow by 5% in 2020, and then benefit from the recovery of memory spending and large investments in advanced processes and the Chinese mainland market, and will rise sharply by 13% in 2021; wafer foundry and logic process spending, which account for about half of the total sales of wafer manufacturing equipment, will also maintain a single-digit stable growth in 2020 and 2021; DRAM and NAND Flash memory spending in 2020 will exceed the level of 2019, and the growth rate of these two memory categories in 2021 will also exceed 20%.

In addition, assembly and packaging equipment continues to grow thanks to advanced packaging technology and the deployment of production capacity. It is expected to grow by 10% in 2020, reaching US$3.2 billion, and will still grow by 8% in 2021, reaching US$3.4 billion. The semiconductor testing equipment market also grew at an impressive rate of 13% in 2020, and the overall testing equipment market will reach US$5.7 billion. It is also expected to continue its growth momentum in 2021 as 5G demand continues to increase.