The global semiconductor landscape is gearing up for a substantial increase in manufacturing capacity, as outlined in SEMI's latest report. The anticipated growth is attributed to the escalating demand for AI in various sectors, including data center training, inference, and cutting-edge device applications. This trend is expected to boost the production capacity of advanced process nodes to 13% in 2024, with further acceleration to a 17% increase in 2025 as major chipmakers like Intel, Samsung, and TSMC commence the production of 2-nanometer Gate-All-Around (GAA) chips.

Regional capacity expansion is led by Chinese chipmakers, who are on track to achieve double-digit growth, reaching 8.85 million wafers per month in 2024 and an anticipated 10.1 million wafers per month in 2025, nearly one-third of the industry's total capacity. Despite the risk of overcapacity, the region continues to aggressively invest in capacity expansion, partly to counteract the impact of recent export controls. Key foundry suppliers, including Huahong Group, Nexchip, Sien Integrated, SMIC, and DRAM manufacturer CXMT, are heavily investing in the region's semiconductor manufacturing capacity.

Other major chip-making regions are expected to see a more moderate capacity growth of no more than 5% in 2025. Taiwan is forecasted to rank second in capacity with a 4% growth rate, reaching 5.8 million wafers per month, while South Korea is projected to take the third spot, expanding its capacity by 7% to 5.4 million wafers per month after surpassing the 5 million wafers per month mark for the first time in 2024.

In terms of segment capacity expansion, the foundry segment is expected to increase by 11% in 2024 and 10% in 2025, driven largely by Intel's establishment of its foundry business and China's capacity expansion, reaching 12.7 million wafers per month by 2026. The rapid adoption of high bandwidth memory (HBM) to meet the rising demand for faster processors required by AI servers is driving unprecedented capacity growth in the memory sector. With the explosive adoption of AI, the demand for denser HBM stacks, integrating 8 to 12 chips per stack, is increasing. Consequently, leading DRAM manufacturers are increasing their investment in HBM/DRAM, with DRAM capacity expected to grow by 9% in both 2024 and 2025.

In contrast, the 3D NAND market recovery remains slow, with no growth in capacity forecast for 2024 and a 5% increase expected in 2025. The proliferation of AI applications in edge devices is anticipated to escalate the DRAM content in mainstream smartphones from 8GB to 12GB and laptops utilizing AI assistants will require at least 16GB of DRAM, further stimulating the demand for DRAM.