MILPITAS, CA — Fueled by surging pandemic-inspired demand for electronics devices, the global semiconductor industry is on track to register a rare three consecutive years of record highs in fab equipment spending, with a 16% increase in 2020, followed by forecast gains of 15.5% this year and 12% in 2022, according to SEMI.

Fabs worldwide will add about $10 billion worth of equipment in each of the three years, as spending climbs to top $80 billion at the end of the forecast period. Explosive demand for electronics that are the backbone of communications, computing, healthcare and online services – sectors that mounted robust responses to the Covid-19 outbreak as the world rallied to curb the coronavirus’s spread – account for much of the spending, the association says.

The semiconductor industry last saw three straight years of fab equipment investment growth in a run that started in 2016. Nearly 20 years before that streak, the industry recorded an expansion of at least three years. In the mid-90s, the chip industry boasted a four-year period of growth.

The bulk of fab investments in 2021 and 2022 will be seen in the foundry and memory sectors. Driven by leading-edge investment, foundry spending is expected to grow 23% in 2021, reach $32 billion, and flatten in 2022. Overall memory spending will increase in the single digits to reach $28 billion in 2021, while DRAM will surpass NAND Flash, and then surge 26% in 2022 on the strength of both DRAM and 3-D NAND investment.

The power and MPU segment will also see strong spending growth over the forecast period. Power is forecast to show investment growth of 46% and 26%, respectively, in 2021 and 2022, driven by demand for power semiconductor devices. MPU will add to the momentum with 40% growth in 2022, as microprocessor investments increase.

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