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IC Gear Sector is Humming

Another year, another sales record for the white-hot semiconductor equipment sector, benefiting from a seemingly inexorable spending spree expected to continue into 2022 despite stricter U.S. restrictions on the sale of advanced tools.

Led by booming orders from Chinese chipmakers and a growing list of new and expanding fabs, the trade group SEMI reported this week that front-end wafer fab equipment orders accounted for $88 billion in global sales during 2021. SEMI forecasts wafer fab equipment sales alone could approach the $100-billion mark in the coming year before tapering off in 2023.

“We expect continuing investments in the digital infrastructure buildout and secular trends across multiple end markets to fuel healthy growth in 2022,” said Ajit Manocha, SEMI president and CEO. That growth trajectory is expected to carry over well into next year, with the global semiconductor manufacturing equipment market expanding to a projected $114 billion.

IC equipment demand driven by leading-edge and mature process nodes accounted for more than half of annual wafer fab equipment sales, jumping 50 percent on an annual basis to $49.3 billion, the industry group reported.

The front-end fab equipment segment includes wafer processing and support services along with mask and reticle gear.

Chipmakers in China, South Korea and Taiwan again fueled the IC equipment buying binge as they scramble to add capacity needed to addresses ongoing chip shortages.

China the biggest spender for the second straight year, was followed by Taiwan. U.S. export controls imposed over the last 18 months likely contributed to last-minute Chinese orders before access to advanced IC production gear was cut off.

SEMI said foundry and logic segments accounted for more than half of wafer fab equipment sales this year, surging 50 percent on an annual basis to $49.3 billion. Investments in those two segments are expected to grow 17 percent in 2022.

Continuing strong consumer and enterprise demand for memory and storage helped fuel orders for DRAM and NAND equipment. The DRAM segment jumped 52 percent on an annual basis to $15.1 billion. SEMI forecasts a slight increase in DRAM gear sales next year to $15.3 billion. Meanwhile, the NAND equipment segment is expected to hit $19.2 billion this year, a 24 percent annual increase, and rise a projected 8 percent next year.

Given the cyclical nature of global demand for memory technologies, the industry group projects the sector will shrink beginning in 2023. Still, the steady deployment of emerging all-flash memory in hyper-scale data centers could keep the sector in the black beyond 2022.

Meanwhile, demand for back-end assembly and packaging equipment is expected to surge a whopping 81 percent this year. The introduction of heterogeneous integration technologies for advanced chip packaging applications will help sustain growth in packaging equipment next year, albeit at more modest levels, SEMI said.

IC test equipment drivers include 5G wireless rollouts, many focused on private 5G networks, and high-performance computing applications making inroads in enterprise data centers.

By EETimes