While global semiconductor manufacturers are stingy with details about fab expansion and capacity utilization, forecasters are nevertheless predicting steady growth in installed “front-end” capacity driven largely by a resurgence in demand for memory.
Asian chip makers benefitting from generous government incentives remain the biggest spenders on new foundry capacity, according to the industry group SEMI. Meanwhile, Intel Corp. and other western IC manufacturers are hustling to catch up with Taiwan Semiconductor Manufacturing Co. (TSMC), Samsung and a host of Chinese upstarts.
For instance, as part of Intel’s $20 billion foundry expansion plan, the chip maker just announced a $3.5 billion expansion at its Rio Rancho, N.M., facility. Intel said this week the investment would expand its advanced IC packaging operations, particularly its Foveros 3D packaging technology.
That effort may be viewed in some quarters as a down payment on an emerging U.S. strategy to revive strategic chip manufacturing via a sharper focus on IC packaging innovations.
For now, SEMI predicts memory technologies will drive global fab expansion, which it expects to grow at a 5-percent clip this year and 6 percent in 2022. Key drivers include 3D NAND—up 9 percent in 2021 and 11 percent next year. Meanwhile, fab capacity for DRAM production is forecast to increase 7 percent this year and 5 percent in 2022.
SEMI also reported record silicon wafer area shipments during the first quarter of 2021, increasing 4 percent over the previous quarter to nearly 3.4 billion inches2. The previous high was set during the third quarter of 2018. Meanwhile, 1Q silicon wafer shipments jumped 14 percent year-on-year from the more than 2.9 billion inches2 recorded during the same period last year.
“Logic and foundry [expansion] continue to drive strong demand for silicon wafers,” said Neil Weaver, vice president of product development and application engineering at Shin-Etsu Handotai American and chairman of SEMI’s Silicon Manufacturers Group.
“The memory market recovery further bolstered shipment growth in the first quarter of 2021,” Weaver added.
Added SEMI’s Edwin Hall in an interview: “Memory will still continue to grow, because it’s important in several areas, especially in data centers, automotive [and] mobile devices.”
While there are unmistakable signs of a U.S. chip manufacturing revival, Intel and others remain heavily outspent by Chinese, Taiwanese and Korean rivals. IC Insights recently reported that China’s Semiconductor Manufacturing International Corp. accounted for the lion’s share of infrastructure spending followed by foundry leader TSMC.
Semiconductor “manufacturing economics are significantly more favorable in Asia, with government incentives driving 45 to 70 percent of the cost advantage,” notes James Lewis, director of the Technology and Public Policy Program at the Center for Strategic and International Studies.
Lewis argues lawmakers need to bear that reality in mind when forging legislation designed to revive U.S. chip manufacturing.
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