Surging demand for artificial intelligence chips is driving a wave of investment into semiconductor manufacturing equipment, following the boom in chip fabrication plants. Global chipmakers are expected to spend about 1,000 trillion won on manufacturing equipment alone over the next four years. As memory and foundry companies expand production capacity to meet growing demand from AI data centers and high-performance computing, equipment spending is projected to rise an average of 15% a year.
SEMI, the industry association for the global electronics manufacturing supply chain, said in a report on the 19th that global investment in 300-millimeter (12-inch) wafer front-end equipment will reach $149 billion (about 198 trillion won) this year, up 31% from a year earlier. Front-end equipment refers to the core machinery used to form and process fine circuits on wafers, the silicon discs that serve as the base material for chips.
Equipment investment is forecast to climb to $172.8 billion (about 230 trillion won) next year and $193.6 billion (about 258 trillion won) in 2028, before reaching $227 billion (about 302 trillion won) in 2029. Adding up SEMI's annual projections, spending from 2026 through 2029 totals $742.4 billion (about 988 trillion won), a compound annual growth rate of 15.1%.
Construction of the fabs that will house the equipment is also accelerating. Excluding facilities dedicated to research and development, SEMI expects 20 fabs and production lines to break ground this year and 18 next year. Seven of those are planned in the United States over the same period. Global spending on fab construction is projected to rise 33% to $63.3 billion (about 84 trillion won) next year from $47.5 billion (about 63 trillion won) this year.
Equipment investment is set to expand fastest in the Americas, including the U.S. Spending there is expected to more than double to $40.6 billion (about 54 trillion won) in 2029 from $18.1 billion (about 24 trillion won) this year, meaning the buildout of U.S. chip production capacity is underpinning growth in the global equipment market.
Ajit Manocha, SEMI's chief executive, said rising chip demand is translating into real capacity expansion across the global semiconductor industry, adding that the investment will support the growth of next-generation chip sectors such as AI and high-performance computing.