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Global Commodity Intelligence

Q2 2025 | APRIL - JUNE

ALERT: Global Semiconductor Fab Capacity to Expand by 6% in 2024

The global semiconductor manufacturing industry is set to expand its capacity by 6% in 2024, followed by a 7% increase in 2025, according to a report by SEMI. This expansion will bring the industry's total capacity to a record high of 33.7 million wafers per month (wpm), measured in 8-inch equivalents.

Leading-edge capacity, particularly for nodes at 5nm and below, is expected to grow significantly by 13% in 2024. This increase is largely driven by the rising demand for generative AI in data center training, inference, and advanced devices. To enhance processing power efficiency, major foundry providers such as Intel, Samsung, and TSMC are gearing up to start production of 2nm Gate-All-Around (GAA) chips. This innovation is projected to push leading-edge capacity growth by 17% in 2025.

"The global semiconductor manufacturing industry is on a robust growth path,
driven by technological advancements and increasing demand
for high-performance chips across various sectors."

The proliferation of AI processing across various applications fuels the race to develop high-performance chips and drives a robust expansion of global semiconductor manufacturing capacity. This growth is expected to create a positive feedback loop, with AI driving the demand for semiconductor content and encouraging further investment.

Chinese chipmakers are poised to maintain a strong growth trajectory, with a 14% increase to 10.1 million wpm in 2025, accounting for nearly a third of the industry’s total capacity. This follows a 15% rise to 8.85 million wpm in 2024. Despite potential risks of overshooting capacity, the region continues its aggressive investment strategy, partly to counteract the effects of recent export controls. Key players like Huahong Group, Nexchip, Sien Integrated, SMIC, and DRAM manufacturer CXMT are driving this growth.

Other major chipmaking regions are expected to see more modest capacity growth. Taiwan is forecast to achieve a 4% growth rate, reaching 5.8 million wpm in 2025, placing it second in capacity. South Korea is projected to expand its capacity by 7% to 5.4 million wpm, surpassing the 5 million wpm mark for the first time in 2024. Japan, the Americas, Europe & the Middle East, and Southeast Asia are anticipated to grow their semiconductor manufacturing capacities to 4.7 million wpm (3% YoY), 3.2 million wpm (5% YoY), 2.7 million wpm (4% YoY), and 1.8 million wpm (4% YoY), respectively.

The foundry segment is expected to experience robust growth, driven by Intel's new foundry business and China's capacity expansion. Foundry capacity is projected to increase by 11% in 2024 and 10% in 2025, reaching 12.7 million wpm by 2026.

In the memory sector, the rapid adoption of high bandwidth memory (HBM) to support AI servers is driving unprecedented capacity growth. The increasing demand for denser HBM stacks, each integrating 8 to 12 dice, has led DRAM manufacturers to boost their investments in HBM/DRAM. Consequently, DRAM capacity is anticipated to grow by 9% in both 2024 and 2025. However, the recovery of the 3D NAND market remains sluggish, with no growth forecast for 2024 and only a 5% increase expected in 2025.

The rise of AI applications in edge devices is also expected to impact DRAM demand significantly. Mainstream smartphones are projected to increase their DRAM content from 8GB to 12GB, while laptops equipped with AI assistants will require at least 16GB of DRAM. This expansion of AI to edge devices will further fuel the demand for DRAM.

The global semiconductor industry is on a robust growth path, driven by technological advancements and increasing demand for high-performance chips across various sectors.