Team ELEBG – Electronics Buyer’s Guide
The global semiconductor sector ended 2024 with solid momentum, achieving 2% growth, driven by strong demand for AI and high-performance computing (HPC). Despite uncertainties surrounding seasonality and broader economic factors, the sector closed the year on a positive note, with expectations for continued growth into 2025.
According to a report from SEMI and TechInsights, the semiconductor manufacturing industry saw a strong fourth-quarter performance and year-on-year (YoY) growth across key segments. Electronics sales, which had weakened in the first half of 2024, rebounded in the latter part of the year, concluding with a 2% annual growth. This was bolstered by a 4% YoY sales increase in 4Q24. Looking ahead, 1Q25 is expected to show a more moderate 1% YoY growth, primarily driven by the ongoing surge in AI applications.
Key Highlights:
- Integrated Circuit (IC) Sales: IC sales grew 29% YoY in 4Q24, largely driven by rising demand for HPC and data centre memory chips, with a 23% YoY increase forecast for 1Q25 as AI adoption accelerates.
- Memory IC Sales: Memory IC revenue grew from $20 billion in 1Q23 to a projected $45 billion by late 2024, highlighting the ongoing shift in demand toward high-bandwidth memory (HBM) for AI applications.
- Logic IC Sales: Logic IC sales, representing the largest portion of total IC revenue, saw a significant increase from $85 billion in 1Q23 to $120 billion by end of 2024.
- CapEx Growth: Capital expenditures in the semiconductor industry showed a strong recovery in the second half of 2024, with a 3% YoY increase. This was largely driven by investments in memory manufacturing and HBM capacity expansion to meet AI demands.
- Semiconductor Equipment Investment: Wafer fab equipment (WFE) spending rose 14% YoY and 8% QoQ in 4Q24, with leading-edge logic, advanced packaging, and HBM expansion seeing the most growth.
Looking Ahead to 2025:
- Semiconductor capacity is expected to continue expanding, with wafer fab capacity reaching over 42 million wafers per quarter in 4Q24, projected to grow further in 1Q25.
- Foundry and logic-related capacity expanded by 2.3% QoQ in 4Q24, with another 2.1% growth expected in 1Q25 as demand for advanced node production increases.
- Economic factors and seasonal trends may moderate short-term growth, but AI and data center investments are set to drive double-digit growth in the second half of the year.
