Decline of 18.6% in Manufacturing Equipment Sales Expected for 2023

SEMI predicts that sales of semiconductor manufacturing equipment by OEMs will experience an 18.6% decline to reach $87.4 billion in 2023, following the industry's record high of $107.4 billion in 2022. However, there is expected to be a recovery in 2024, with sales reaching $100 billion, driven by both the front-end and back-end segments.

Specifically, sales of wafer fab equipment, which includes wafer processing, fab facilities, and mask/reticle equipment, are projected to decrease by 18.8% to $76.4 billion in 2023, surpassing SEMI's earlier prediction of a 16.8% decline in their 2022 year-end forecast. The wafer fab equipment segment is anticipated to contribute significantly to the recovery in 2024, generating $87.8 billion in sales, representing a 14.8% increase.

The back-end equipment segment is expected to continue its decline in 2023 due to challenging macroeconomic conditions and softening semiconductor demand. Sales of semiconductor test equipment are projected to fall by 15% to $6.4 billion in 2023, while assembly and packaging equipment sales are expected to drop by 20.5% to $4.6 billion. However, both the test equipment and assembly and packaging equipment segments are predicted to expand by 7.9% and 16.4%, respectively, in 2024.

In terms of specific applications, equipment sales for foundry and logic applications, which account for over half of total wafer fab equipment receipts, are expected to decline by 6% year-over-year to $50.1 billion in 2023, reflecting softer end-market conditions. Demand for leading-edge foundry and logic is expected to remain stable in 2023, with a slight softening offset by increased spending on mature nodes. Foundry and logic investments are projected to increase by 3% in 2024.

DRAM equipment sales are anticipated to decrease by 28% to $8.8 billion in 2023 due to weak consumer and enterprise demand for memory and storage. However, a rebound of 31% is expected in 2024, with sales reaching $11.6 billion. Similarly, NAND equipment sales are projected to decline by 51% to $8.4 billion in 2023 but surge by 59% to $13.3 billion in 2024.

Mainland China, Taiwan, and Korea are expected to remain the top three destinations for equipment spending in both 2023 and 2024. While Taiwan is forecasted to regain the lead in 2023, Mainland China is projected to reclaim the top position in 2024. Equipment spending for most regions tracked is expected to decline in 2023 before returning to growth in 2024.