Semiconductor Equipment

Global chip investments decline for second year amid weak demand

22 January 2025

Global chipmakers reduced investment in 2024, the second consecutive year of decline in global semiconductor investment from vendors.

According to a report from Nikkei, the reduction is due to weak demand and overcapacity in semiconductors for electric vehicles (EVs) and smartphones. This is despite a rise in demand for AI-based semiconductors and a rise in AI-enabled phones.

The report found that the 10 leading semiconductor companies in the U.S., Europe, South Korea, Taiwan, Japan and China had an aggregate 2% decline year-over-year to $123.3 billion. In 2023, due to a drop in demand for smartphones, chipmakers scaled back investments despite demand increasing for AI.

This coincides with a report from SEMI that found about 70% of global chip fab capacity is currently utilized. Falling below the 80% threshold is regarded as unhealthy in the semiconductor manufacturing market.

Big cutters

Among chipmakers, Intel reduced its investment to $25 billion, about 20% lower than the initial projected figure. Samsung Electronics also reduced semiconductor-related investments for 2024 by about 1% to $35 billion. This is the first investment reduction in five years from Samsung, according to market research firm TrendForce.

Automotive semiconductor investment seems to be a focal point of the decline in investment due to a slowdown in EV demand in Europe and the U.S.

The report did indicate that the Chinese pure-play foundry Semiconductor Manufacturing International Corp. (SMIC) is on track to maintain a record capital expenditure level from 2023 into 2024.

To contact the author of this article, email PBrown@globalspec.com


Powered by CR4, the Engineering Community

Discussion – 0 comments

By posting a comment you confirm that you have read and accept our Posting Rules and Terms of Use.
Engineering Newsletter Signup
Get the GlobalSpec
Stay up to date on:
Features the top stories, latest news, charts, insights and more on the end-to-end electronics value chain.
Advertisement
Weekly Newsletter
Get news, research, and analysis
on the Electronics industry in your
inbox every week - for FREE
Sign up for our FREE eNewsletter
Advertisement
Find Free Electronics Datasheets
Advertisement