Leading-edge capacity for 5nm nodes and under is expected to grow 13% in 2024, chiefly driven by generative artificial intelligence (AI) for data center training, inference, and leading-edge devices. To increase processing power efficiency, chipmakers including Intel, Samsung, and TSMC are poised to start production of 2nm Gate-All-Around (GAA) chips, boosting total leading-edge capacity growth by 17% in 2025.
"The proliferation of AI processing, from cloud computing to edge devices, is fueling the race to develop high-performance chips and driving a robust expansion of global semiconductor manufacturing capacity," said Ajit Manocha, SEMI president and CEO. "This creates a virtuous cycle: AI will drive the growth of semiconductor content across a diverse range of applications, which in turn encourages further investment."
Capacity Expansion by Region
Chinese chipmakers are expected to maintain double-digit capacity growth, registering a 14% increase to 10.1 million wpm in 2025 – nearly a third of the industry's total – after logging a 15% rise to 8.85 million wpm in 2024. Despite the potential risks of an overshoot, the region continues aggressive investment in its capacity expansion, in part to mitigate the impact of recent export controls. Major foundry suppliers including Huahong Group, Nexchip, Sien Integrated and SMIC and DRAM maker CXMT are investing heavily to grow the region's semiconductor manufacturing capacity.
Most of the other major chipmaking regions are expected to see capacity growth of no more than 5% in 2025. Taiwan is forecast to rank second in capacity in 2025 at 5.8 million wpm, a 4% growth rate, while South Korea is projected to take the third spot next year, expanding capacity 7% to 5.4 million wpm after surpassing the 5 million wpm mark for the first time in 2024. Japan, the Americas, Europe & Mideast, and Southeast Asia are expected to grow semiconductor manufacturing capacity 4.7 million wpm (3% YoY), 3.2 million wpm (5% YoY), 2.7 million wpm (4% YoY), and 1.8 million wpm (4% YoY), respectively.
Capacity Expansion by Segment
Fueled largely by Intel's establishment of its foundry business and China's capacity expansion, the foundry segment is projected to increase capacity 11% in 2024 and 10% in 2025, reaching 12.7 million wpm by 2026.
Rapid adoption of high bandwidth memory (HBM) to meet rising demand for faster processors required by AI servers is powering unprecedented capacity growth in the memory sector. Exploding AI adoption has driven increasing demand for denser HBM stacks, with each stack now integrating 8 to 12 dice. In response, leading DRAM makers are increasing investment in HBM/DRAM. DRAM capacity is expected to increase by 9% in both 2024 and 2025. By contrast, the 3D NAND market recovery remains slow, with no growth in capacity forecast for 2024 and a 5% increase expected in 2025.
The rise of AI applications in edge devices is expected to increase DRAM content in mainstream smartphones from 8GB to 12GB, while laptops using AI assistants will need at least 16GB of DRAM. The expansion of AI to edge devices will also stoke demand for DRAM.
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