MILPITAS, CA – 2021 is poised to mark a banner year for global fab equipment spending, with 24% growth to a record $67.7 billion. All product segments are promising solid growth rates, according to SEMI.

Memory fabs will lead worldwide semiconductor segments with $30 billion in equipment spending, while leading-edge logic and foundry is expected to rank second with $29 billion in investments.

The 3-D NAND memory subsegment will help power the spending spree, with a 30% jump in investments this year, before tacking on 17% growth in 2021. DRAM fab investments will surge 50% next year after declining 11% in 2020, and fab spending on logic and foundry, mainly leading edge, will rise 16% in 2021 after an 11% drop this year, according to the firm.

Image sensors will notch a 60% increase in 2020 and a 36% surge in 2021. Analog and mixed signal will grow 40% this year and 13% next year. Power-related devices are forecast to grow 16% in 2020, with a jump of 67% in 2021.

Global fab equipment spending declined 15% sequentially in the first quarter – performance that was stronger than the 26% decline forecast in February. In March, some companies appeared to build up safety stock as a countermeasure to the spreading Covid-19 virus. As the contagion grew, demand for IT and electronic products such as notebooks, game consoles and healthcare applications surged. Some stockpiling is expected to stretch into the second quarter, fueled by fear of restrictions – scheduled to take effect in late June – on semiconductor equipment sold to China.

SEMI predicts rising investments in the second half of 2020, but the year will mark the second consecutive yearly drop in fab equipment spending: 4% this year after an 8% dip in 2019.

Threats from the pandemic still lurk. Pandemic-related layoffs, with more than 40 million workers idled in the US alone as of May, and company closures will trigger ripple effects in consumer markets and discretionary spending. For instance, rising unemployment will lead to falling smartphone and new car sales. Despite those downdrafts, digital transformation and the need to communicate will drive industry growth as cloud services, server storage, gaming and health applications spur demand for memory and IT-related devices.

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