Semiconductor Industry Sees Positive Growth in Q1 2024

The semiconductor manufacturing industry experienced encouraging developments in the first quarter of 2024, with notable increases in electronic sales, stable inventories, and a rise in wafer fab capacity. The latest Semiconductor Manufacturing Monitor (SMM) Report for Q1 2024, created in partnership with TechInsights, points towards a promising outlook for the industry in the coming months.

During Q1 2024, electronic sales grew by 1% compared to the previous year, and a further 5% increase is projected for Q2 2024. Integrated circuit (IC) sales demonstrated robust growth of 22% year-over-year in Q1 2024, with expectations of a 21% surge in Q2 2024. This growth is being primarily driven by high-performance computing chips and improving memory pricing. Inventory levels for ICs stabilized in Q1 2024 and are anticipated to continue improving in the current quarter.

The installed wafer fab capacity exceeded 40 million wafers per quarter in Q1 2024, with a forecasted 1.4% increase in Q2 2024. Notably, China led the way in capacity expansion among regions. However, concerns remain regarding fab utilization rates, particularly for mature nodes, with no significant recovery anticipated in the first half of 2024.

Memory utilization rates in Q1 2024 were lower than expected due to controlled supply. Semiconductor capital expenditures remained conservative, with a slight uptick anticipated in Q2 2024, especially in memory-related investments. The demand for AI chips and high-bandwidth memory is fueling capacity expansion in these segments, although the impact on IC shipment growth is constrained by reliance on a few key suppliers.

The first half of 2024 witnessed varied semiconductor demand trends, with memory and logic sectors rebounding due to increased generative AI demand. Conversely, analog, discrete, and optoelectronics experienced a slight decline owing to sluggish recovery in the consumer market and reduced demand from the automotive and industrial sectors.

A more comprehensive industry recovery is expected in the latter part of the year, driven by rising consumer demand stemming from AI expansion to the edge. Additionally, growth in the automotive and industrial markets is anticipated as interest rates decrease and inventory levels decline. These factors are poised to contribute to a more robust industry performance in the coming months.

The Semiconductor Manufacturing Monitor (SMM) report provides in-depth insights into the global semiconductor manufacturing industry, covering crucial trends in capital equipment, fab capacity, and sales. The report includes a market forecast and offers valuable information on leading companies within the semiconductor manufacturing supply chain. For further details or to subscribe to the SMM report, readers can reach out to the SEMI Market Intelligence Team.