The global semiconductor manufacturing industry in the second quarter of 2024 continued to show signs of improvement with significant growth of IC sales, stabilizing capital expenditure, and an increase in installed wafer fab capacity, according to a recent report published by SEMI in collaboration with TechInsights. While the slower recovery in some end markets impacted the pace of growth in the first half of this year, the surge in demand for AI chips and high bandwidth memory (HBM) created strong tailwinds driving industry expansion.
Seasonality and weaker-than-expected consumer demand impacted electronics sales in the first half of 2024 resulting in a 0.8% decrease year-on-year, according to the report. Starting the third quarter of 2024, electronics sales are forecast to see a rebound, growing 4% year-on-year and 9% relative to the prior second quarter.
IC sales showed robust 27% year-on-year growth in the second quarter of 2024 and are expected to surge 29% in the third quarter, surpassing the record levels seen in 2021 as the AI-fueled demand continues to boost IC sales growth. Improved demand also led to a 2.6% year-on-year decrease in IC inventory levels in the first half of 2024.
Installed wafer fab capacity reached 40.5 million wafers per quarter (in 300mm wafer equivalent) in the second quarter of 2024 and is projected to rise 1.6% in the third quarter. Foundry and Logic-related capacity showed stronger growth in the second quarter at 2.0% and is expected to increase 1.9% in the third quarter, driven by capacity build-up for advanced nodes.
Memory capacity increased 0.7% in the second quarter and is forecast to see 1.1% growth in the third quarter, driven by high demand for HBM and improving memory pricing conditions. All regions tracked saw installed capacity increases in the second quarter, with China remaining the fastest-growing region despite mediocre fab utilization rates.
Semiconductor capital expenditures were conservative in the first half of 2024, resulting in a 9.8% decrease year-on-year. The trend is expected to turn positive in the third quarter of 2024 in response to rising demand for AI chips and rapid adoption of HBM, with memory capex leading the way at 16% quarter-on-quarter, while non-memory capital expenditures rise by 6%.
"Despite moderate semiconductor capital expenditures in the first half of the year, we expect a positive trend to begin in the third quarter of 2024 led by memory CapEx," said Clark Tseng, senior director of market intelligence at SEMI. "Strong demand for AI chips and high bandwidth memory is boosting results in various segments of the semiconductor manufacturing ecosystem."
"The entire semiconductor supply chain is recovering this year as the market prepares for a surge in 2025," said Boris Metodiev, director of market analysis at TechInsights. "AI is certainly continuing to drive high-value ICs to the market, while also supporting CapEx for capacity expansion of AI chips and especially HBM. As consumer demand recovers, and new technologies like AI are pushed to the edge, unit volumes and especially revenues will recover and support the broader semiconductor manufacturing sector."
