Global semiconductor industry anticipates Q4 2023 uplift

This forecast comes from SEMI's Q3 2023 edition of the Semiconductor Manufacturing Monitor (SMM) Report, co-produced with TechInsights.

Electronic sales are poised to achieve a substantial 22% increase from the previous quarter in Q4 2023, following a 7% rise in Q3 2023. Integrated Circuit (IC) sales are also set to grow by 4% sequentially, building on a 7% increase in the third quarter as demand escalates and inventory levels stabilise.

However, key semiconductor manufacturing metrics show continued softness. Fabrication plant utilisation and capital investment are on a downward trend in the latter half of the year. Overall, expenditure on non-memory components is predicted to surpass memory spending in 2023, although investment in non-memory segments is showing signs of decline. Total capital expenditure in Q4 2023 is projected to align with the figures from the final quarter of 2020.

Notably, while the overall sales of semiconductor capital equipment decline in tandem with capital expenditure, the decrease in wafer fabrication equipment spend is not as pronounced as forecasted earlier in the year. Additionally, billings for back-end equipment are expected to witness an upswing in Q4 2023.

Boris Metodiev, Director of Market Analysis at TechInsights, remarked: “While semiconductor markets have seen year-over-year declines the last five quarters, year-over-year growth is expected to return in the fourth quarter of 2023 as production cuts have worked their way through the supply chain. On the other hand, front-end equipment sales have been performing much better than the IC market, buoyed by government incentives and the filling of backlogs, strength expected to continue next year.”

Clark Tseng, Senior Director of Market Intelligence at SEMI, commented: “Despite low fab utilisation rates and slowing capital expenditures in the second half of 2023, we expect back-end equipment billings to bottom in Q4 2023. This will mark an important turnaround for the chip manufacturing industry, signalling a recovery from the downturn with building momentum in 2024.”

The SMM report provides comprehensive data on the global semiconductor manufacturing industry, spotlighting trends based on industry indicators such as capital equipment, fabrication capacity, and semiconductor and electronics sales, including forecasts for the capital equipment market. It also offers a quarter outlook and two years of quarterly data for the semiconductor manufacturing supply chain, including IDM, fabless, foundry, and OSAT companies.