[News] Global Semiconductor CapEx Rises 27% in Q1, with Memory Spending Surging Over 50%

According to SEMI’s latest report, global semiconductor capital expenditures (CapEx) fell 7% quarter-over-quarter in Q1 2025 but rose 27% year-over-year, driven by sustained investments in advanced logic, high-bandwidth memory (HBM), and advanced packaging technologies that support AI applications.

SEMI notes that memory-related CapEx surged 57% year-over-year, while spending on non-memory segments increased by 15% over the same period.

The report also indicates that spending on wafer fab equipment (WFE) grew 19% year-over-year in Q1 2025 and is expected to increase another 12% in Q2, fueled by robust investments in advanced logic and memory production to meet growing AI demand.

Test equipment billings jumped 56% year-over-year in Q1 and are projected to grow by 53% in Q2, driven by the demands of testing AI and HBM chips, according to the report.

Spending on packaging and test equipment also recorded double-digit growth, supported by rising demand for high-density integration and advanced packaging technologies, the report notes.

As indicated by the report, global installed wafer fab capacity continues to expand, underpinned by increased capital investment. Capacity is projected to exceed 42.5 million 300mm-equivalent wafers per quarter in Q1 2025—up 2% from the previous quarter and 7% year-over-year, as the report highlights.

China’s Growing Wafer Capacity

SEMI notes that China remains the leading region for wafer capacity expansion. However, the report adds that its growth momentum is expected to moderate in the coming quarters.

Meanwhile, Japan and Taiwan are seeing the fastest quarterly capacity increases, driven by major investments in Japan’s power semiconductor sector and the ramp-up of a cutting-edge foundry in Taiwan, according to the report.

Major Chipmakers Ramp Up Capital Expenditures: TSMC and SMIC

Global semiconductor firms have been ramping up spending. Notably, during its Q1 2025 earnings call, TSMC reaffirmed its full-year CapEx guidance of USD 38 billion to USD 42 billion, in line with market expectations, according to Economic Daily News. This would mark a record high, with the midpoint reaching USD 40 billion. TSMC’s capital spending in Q1 stood at USD 10.06 billion, slightly down from USD 11.23 billion in the previous quarter, the report adds.

TSMC expects about 70% of its 2025 capital expenditures to go toward advanced process technologies, 10% to 20% toward specialty technologies, and another 10% to 20% for advanced packaging, testing, photomask production, and other areas. As noted by Economic Daily News, the company explained that a small portion of its 2025 CapEx is related to its plan to expand its Arizona operations, which could involve over USD 100 billion in total investment.

Meanwhile, China’s largest foundry, SMIC, plans to invest USD 7 billion in capital expenditures this year, as disclosed during its Q1 2025 earnings call, according to Wccftech. The increased spending reflects growing domestic demand and efforts to advance chipmaking technologies following U.S. sanctions that barred TSMC from supplying chips to Huawei, the report notes.

Read more

• [News] Chinese Chipmakers Ramp Up R&D Spending in 2024 — SMIC Tops the List with RMB 5.45B
• [News] Amazon Taps the Brakes on Data Center Leasing? TrendForce Sees Strategy Shift, Warns of Capex Caution

(Photo credit: Intel)