China to Continue to Lead in Chip Equipment Spending

The Association of Chip Design and Manufacturing Companies (SEMI) forecasts that China will remain the leader in global chip equipment spending. The country will continue to lead despite an expected double-digit decline this year from a peak of $50 billion in 2024.

The group predicts China’s spending in the sector will drop 24% to $38 billion in 2025, with a 5% decline to $36 billion in 2026. Overall global fab equipment capex is predicted to increase by 2% to $110 billion in 2025 and by 18% to $130 billion in 2026. The projected growth will be driven by rising demand from the high-performance computing (HPC) and memory sectors to support data center expansion and chips running on edge devices.

SEMI president and CEO Ajit Manocha highlighted that the forecast signals an urgent need for intensified workforce development initiatives in 2025 and 2026 to deliver the skilled workers necessary for the approximately 50 new fabs expected to come online. Investment by Korean chipmakers is forecast to grow 29% to $21.5 billion in 2025 and 26% to $27 billion in 2026, placing it second. Taiwan is on track to secure third place, with spending reaching $21 billion in 2025 and $24.5 billion in 2026. Spending in the memory segment is expected to grow by 2% to $32 billion by the end of 2025 and 27% in 2026.