August 22, 2024 /SemiMedia/ -- According to a recent report released by SEMI and TechInsights, the global semiconductor manufacturing industry showed significant improvement in Q2 2024, with strong growth in IC sales and an increase in wafer fab capacity. Despite a slower recovery in certain end markets, robust demand for AI chips and high-bandwidth memory (HBM) has been a major driving force behind the industry’s growth.

The report noted that seasonal factors and weak consumer demand led to a 0.8% year-on-year decline in electronics sales in the first half of 2024. However, electronics sales are expected to rebound in Q3 2024, with a year-on-year growth of 4%. IC sales grew by 27% year-on-year in Q2 2024 and are expected to increase by 29% year-on-year in Q3, surpassing the record levels set in 2021. This growth is largely driven by rising demand fueled by artificial intelligence.

Wafer fab capacity reached 40.5 million wafers per quarter (in 300mm equivalents) in Q2 2024, with a projected growth of 1.6% in Q3. Foundry and logic-related capacity are expected to continue growing in Q3, driven by increases in advanced node capacity. Despite low fab utilization rates, China remains the fastest-growing region.

Semiconductor capital expenditure was cautious in the first half of 2024, down 9.8% year-on-year. However, with increasing demand for AI chips and HBM, this trend is expected to turn positive from Q3 2024, with memory capital expenditure growing 16% quarter-on-quarter, and non-memory capital expenditure increasing by 6% quarter-on-quarter.

Clark Tseng, Senior Director of Market Intelligence at SEMI, stated that strong demand for AI chips and HBM is driving growth across various sectors of the semiconductor manufacturing ecosystem. Boris Metodiev, Director of Market Analysis at TechInsights, added that AI will continue to drive high-value ICs into the market, supporting capital expenditures to expand AI chip production, particularly in the HBM segment.