According to the CEO of Mubadala, the main shareholder of founder GlobalFoundries, semiconductor sales are expected to reach $ 2 trillion by 2035. A prospect that has prompted the entire industry to make heavy investments in order to respond to the very strong increase in demand and consolidate their market share in the years to come.
It’s no secret that semiconductor makers have significantly increased their capital spending this year to meet the surge in demand since the start of the pandemic. Today, the CEO of Mubadala, main shareholder of GlobalFoundries (3rd largest founder in the world), said in an interview with CNBC that semiconductor sales are expected to continue to grow very strongly in the years to come, reaching the hefty $ 2 trillion by the mid-2030s. ” It took 50 years for the semiconductor business to grow into a half-trillion dollar business. It will probably take eight to ten years to double (by 2030 – 2031). And it will double again four to five years later “.
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To meet global demand, chipmakers are set to spend $ 152 billion on new factories and production equipment this year, up from $ 113.1 billion last year. On a percentage basis, this is a 34% year-over-year increase, the strongest year-on-year growth since 2017, when cumulative investments by semiconductor companies increased by 41 % over the year earns IC Insights.
Breakdown of investment spending in semiconductors around the world by product type.
Contract manufacturers like TSMC, Samsung Foundry and GlobalFoundries will lead the entire industry in spending with $ 53 billion in investment (35% of all semiconductor investment spending in 2021). TSMC, the world’s largest founder, intends to spend between $ 25 billion and $ 35 billion on its own to build new manufacturing capacity, with a target for 3nm chip production by 2023 and in 2nm by 2025. Only the Chinese manufacturer SMIC (5th world founder) has planned to reduce its capital expenditure for 2021 despite the demand, since being registered with the American Bureau of Industry and Security, it is difficult for him to obtain tools from American companies such as Applied Materials, KLA or Lam Research.
Meanwhile, memory chipmakers are expected to spend $ 51.9 billion this year, including $ 27.9 billion on new flash production capacity and $ 24 billion on DRAM production. Microprocessor manufacturers, for their part, led by Intel, are on track to increase their investments to 23.5 billion dollars this year (+ 42% compared to 2020) for sales which are expected to reach 103.7 billion dollars ( + 14%). US-based Intel alone is expected to spend around $ 19 billion in capital spending on expanding its factory network in 2021.
These staggering numbers come as demand for chips continues to outstrip supply. This shortage, which first affected the automobile sector, affected the entire electronics sector, whether it was for household appliances, consoles or smartphones. But despite the best efforts, most analysts agree that the supply shortage will not return to normal until at least 2023.