China Expected to Lead Global Chipmaking Investments in 2025, SEMI Reports

In a report by SEMI, China is projected to lead chipmaking investment in 2025, despite a 24% decline from 2024. Global investments in chipmaking equipment will grow to $110 billion this year. AI demand will further boost investments in 2026, signaling a robust recovery in the sector.

In 2025, China is expected to lead in investments in new computer chipmaking equipment, according to a report from SEMI Group. Despite a notable decline from the previous year, China will outpace other regions, followed by Taiwan and South Korea. SEMI’s report also indicates that global investments in chipmaking equipment will rise by 2% this year, amounting to $110 billion, primarily driven by the demand for artificial intelligence chip production.

The demand for AI technologies is anticipated to further stimulate investment, with projections indicating an 18% increase in 2026. For many years, China has been the largest consumer of chips, which has resulted in expanded chipmaking capacity. Significant investments were made starting in mid-2023, bolstered by government support, to reduce reliance on imports in light of U.S. restrictions.

ASML, the leading manufacturer of chip equipment, forecasts sales between €32 billion and €38 billion for 2025, projecting a market share exceeding 25% in the lithography sector. Other prominent equipment manufacturers include Applied Materials, KLA, LAM Research, and Tokyo Electron. Notably, Chinese companies such as Naura, AMEC, and Huawei affiliate SiCarrier are rapidly increasing their market presence.

Chinese investments in chipmaking are expected to decrease to $38 billion in 2025, a 24% decline from $50 billion in 2024. Nevertheless, this figure remains considerably higher than South Korea’s anticipated $21.5 billion. Taiwan’s spending, led by TSMC’s production of AI chips for Nvidia, is estimated at $21 billion. Additionally, the Americas and Japan are each expected to invest $14 billion, whereas Europe will allocate $9 billion toward chipmaking expenses, as reported by SEMI.

In summary, while China is poised to maintain its leading position in chipmaking investments in 2025, a reduction in spending is anticipated. The significant investments in the sector, particularly driven by AI demand, reflect a global trend towards increased chip production capabilities. The competitive landscape among regions like Taiwan and Korea highlights the ongoing strategic importance of chip manufacturing in the technology sector.

Original Source: money.usnews.com