With circuit chip sales up 27% year-over-year, the global semiconductor industry marked an upturn in Q2 2024, driven by AI chip demand, increased wafer fab capacity, and stable capex.
The global semiconductor manufacturing industry reportedly improved in the second quarter of 2024, allowing growth in various chip sectors in the next quarter. According to SEMI’s Q2 2024 Semiconductor Manufacturing Monitor (SMM) Report, integrated circuit (IC) sales experienced robust growth of 27% year-over-year in Q2 2024, with projections indicating a 29% surge in Q3 2024, surpassing 2021’s record levels.
SEMI stated that the growth was driven by stable capital expenditures and a rise in installed wafer fab capacity, in addition to the IC sales growth. Although some end markets experienced slower recovery, heightened demand for AI chips and high-bandwidth memory (HBM) fuelled the industry’s expansion.
However, improved demand led to a 2.6% decline in IC inventory levels during the first half of the year. Electronics sales also faced a 0.8% YoY decrease in the first half of 2024 but are expected to rebound by 4% YoY and 9% compared to Q2 2024 starting in Q3.
Installed wafer fab capacity reached 40.5 million wafers per quarter in Q2 2024 and is anticipated to grow by 1.6% in Q3. All regions reported capacity increases, with China leading despite lower fab utilisation rates.
Capacity for foundry and logic-related processes saw a 2% increase and is projected to rise by 1.9% in Q3. In comparison, memory capacity grew by 0.7% and is expected to increase by 1.1% due to strong HBM demand.
Capital expenditures in the semiconductor sector declined by 9.8% YoY in the first half of 2024 but are expected to improve in Q3 2024, due to growing demand for AI chips and HBM.
Memory capex is predicted to lead this growth with a 16% quarter-on-quarter increase, while non-memory capex is expected to rise by 6% QoQ.
Commenting on the overall market performance in 2Q24, Boris Metodiev from TechInsights highlighted that the semiconductor supply chain is recovering and preparing for increased activity in 2025, driven by AI and expanding technologies.
