AI data center demand drove strong growth in global semiconductor manufacturing in Q3

     According to the "Semiconductor Manufacturing Monitor (SMM) Report for the Third Quarter of 2024" recently released by the International Semiconductor Industry Association (SEMI) in collaboration with TechInsights, the global semiconductor manufacturing industry achieved the first positive quarter-on-quarter (QoQ) growth in all key industry indicators in the third quarter of 2024 in two years.

     The report points out that the investment needs of AI data centers have become the main driving force for the growth of semiconductor manufacturing. With the rapid development of AI technology and the wide diffusion of applications, the demand for high-performance computing, storage and data processing is rising, which directly stimulates the demand for semiconductor products. Particularly in the data center sector, the strong demand for memory chips, coupled with an overall increase in the price of memory products, further drove the growth of IC sales.

     After a decline in the first half of 2024, electronics sales rebounded in the third quarter, growing 8% sequentially, and are expected to grow 20% sequentially in the fourth quarter. IC sales also performed well, growing 12% sequentially in the third quarter and are expected to grow another 10% in the fourth quarter. Overall, IC sales are expected to grow by more than 20% in 2024, driven primarily by memory products.

     In addition, semiconductor capital expenditures (CapEx) declined in the first half of 2024, but turned positive from the third quarter. Memory-related capital expenditures increased 34% sequentially and 67% year-over-year in the third quarter, demonstrating a significant improvement in the memory IC market compared to the same period last year. Total capital expenditures in the fourth quarter are expected to increase 27% sequentially and 31% year-over-year, with memory-related capital expenditures growing at a 39% year-over-year rate.

     The report points out that the investment needs of AI data centers have become the main driving force for the growth of semiconductor manufacturing. With the rapid development of AI technology and the wide diffusion of applications, the demand for high-performance computing, storage and data processing is rising, which directly stimulates the demand for semiconductor products. Particularly in the data center sector, the strong demand for memory chips, coupled with an overall increase in the price of memory products, further drove the growth of IC sales.

     After a decline in the first half of 2024, electronics sales rebounded in the third quarter, growing 8% sequentially, and are expected to grow 20% sequentially in the fourth quarter. IC sales also performed well, growing 12% sequentially in the third quarter and are expected to grow another 10% in the fourth quarter. Overall, IC sales are expected to grow by more than 20% in 2024, driven primarily by memory products.

     In addition, semiconductor capital expenditures (CapEx) declined in the first half of 2024, but turned positive from the third quarter. Memory-related capital expenditures increased 34% sequentially and 67% year-over-year in the third quarter, demonstrating a significant improvement in the memory IC market compared to the same period last year. Total capital expenditures in the fourth quarter are expected to increase 27% sequentially and 31% year-over-year, with memory-related capital expenditures growing at a 39% year-over-year rate.