Global fab equipment spending for front-end facilities in 2025 is anticipated to increase by 2 percent year-over-year (YoY) to $110 billion, marking the sixth consecutive year of growth since 2020, according to industry association SEMI.
Fab equipment spending is projected to rise by 18 percent in the following year, reaching $130 billion.
This growth in investment is driven not only by demand in the high-performance computing (HPC) and memory sectors to support data center expansions, but also by the increasing integration of artificial intelligence (AI), which is driving up the silicon content required for edge devices.
Ajit Manocha, SEMI president and CEO, says: “The global semiconductor industry’s investments in fab equipment have been edging up for six straight years, and spending is poised to see a strong 18 percent increase in 2026 as production ramps to meet booming AI-related chip demand.
“This forecasted capex growth signals an urgent need for intensified workforce development initiatives throughout 2025 and 2026 to deliver skilled workers necessary for the approximately 50 new fabs expected to come online during these two years.”
Logic & Micro segment lead expansion
The Logic & Micro segment is anticipated to be a key driver of growth in fab investments. This growth is primarily fueled by investments in cutting-edge technologies, such as 2-nanometer process and backside power delivery technology, which are expected to enter production by 2026.
The Logic & Micro segment is projected to see an 11 percent increase in investments, reaching $52 billion in 2025, followed by a 14 percent increase to $59 billion in 2026.
Overall Memory segment spending is expected to grow steadily the next two years, increasing by 2 percent to reach $32 billion by 2025, with an even stronger growth forecast of 27 percent in 2026.
Investments in the DRAM segment are projected to decline by 6 percent year-over-year, totaling $21 billion in 2025, but are anticipated to rebound with a 19 percent increase to $25 billion in 2026.
Conversely, NAND segment spending is expected to recover significantly, rising by 54 percent year-over-year to $10 billion in 2025, and further increasing by 47 percent to $15 billion in 2026.
China continues to lead in regional fab equipment spending
Despite a decline from a peak of $50 billion in 2024, China is expected to maintain its position as the leader in global semiconductor equipment spending, with projections of $38 billion in 2025 representing a 24 percent year-over-year decrease. By 2026, spending is forecast to decline further 5 percent year-over-year to $36 billion.
With the growing penetration of AI technology driving higher memory adoption, Korean chipmakers are planning to invest more in equipment for capacity expansion and technology upgrades, which is expected to position the region as the second highest spending through 2026.
Korean investment is forecasted to grow by 29 percent to $21.5 billion in 2025 and by 26 percent to $27 billion in 2026.
Taiwan is set to secure third place in spending as its chipmakers aim to enhance their leadership in advanced technology and production capabilities. Taiwan is projected to spend $21 billion in 2025 and $24.5 billion in 2026 to meet the growing demand for AI applications across cloud services and edge devices.
The Americas region ranks fourth, with expected spending of $14 billion in 2025 and $20 billion in 2026. Japan, Europe and the Middle East, and Southeast Asia follow in investments, projected to spend $14 billion, $9 billion, and $4 billion in 2025, and $11 billion, $7 billion, and $4 billion in 2026, respectively.
The latest update of the SEMI World Fab Forecast report, published in March, lists more than 1,500 facilities and lines globally, including 156 facilities and lines with various probabilities expected to start operation in 2025 or later.
