March 27, 2025 /SemiMedia/ — SEMI forecasts that global front-end fab equipment spending will rise by 2% year-on-year to $110 billion in 2025, marking the sixth consecutive year of growth. Spending is projected to increase by 18% to $130 billion in 2026.

The growth is driven by strong demand for high-performance computing (HPC) and memory to support data center expansion, as well as the increasing integration of artificial intelligence (AI), which boosts silicon content in edge devices.

“The semiconductor industry has maintained steady investment in fab equipment for six years, with spending expected to surge 18% in 2026 to support the expansion of AI-related chip production,” said SEMI President and CEO Ajit Manocha. “This capital expenditure underscores the urgent need to strengthen workforce development programs to supply skilled labor for approximately 50 new fabs expected to come online in 2025 and 2026.”

By segment, logic and microelectronics are set to be the primary growth drivers, fueled by investments in 2nm process technology and backside power delivery, both expected to enter production in 2026. Spending in this segment is projected to grow 11% to $52 billion in 2025 and 14% to $59 billion in 2026. Memory sector spending is also set for steady growth, rising 2% to $32 billion in 2025, followed by a 27% surge in 2026.

Regionally, China is expected to remain the largest spender on semiconductor equipment despite a projected 24% decline in 2025 to $38 billion from the peak of $50 billion in 2024. Spending is anticipated to decline further to $36 billion in 2026. Meanwhile, South Korean chipmakers are ramping up investments, with spending forecasted to grow 29% to $21.5 billion in 2025 and 26% to $27 billion in 2026, positioning South Korea as the second-largest fab equipment investment region globally.