SEMI reports findings from its latest 300mm Fab Outlook report. The report shows global front-end semiconductor suppliers are accelerating expansion efforts to support the surging demand for generative AI applications. 

According to the 300mm Fab Outlook report, the global semiconductor manufacturing industry is expected to maintain strong momentum, with capacity projected to grow at a compound annual growth rate (CAGR) of 7% from the end of 2024 through 2028, reaching a record high of 11.1 million wafers per month (wpm).

A key driver of this growth is the continued expansion of advanced process capacity (7nm and below), which is expected to increase by approximately 69% – from 850,000 wpm in 2024 to a historic high of 1.4 million wpm in 2028 – representing a CAGR of around 14%, double the industry average.

“AI continues to be a transformative force in the global semiconductor industry, driving significant expansion of advanced manufacturing capacity,” says Ajit Manocha, SEMI president and CEO. “The rapid proliferation of AI applications is stimulating robust investment across the semiconductor ecosystem, underscoring the industry’s pivotal role in fostering technology innovation and meeting the surging demand for advanced chips.”

Beyond the demand for increasingly powerful training capabilities to support larger AI model architectures, AI inference has emerged as another critical catalyst for growth. Market expansion is further fueled by AI’s integration into system software for personal assistants and innovative applications.

Moreover, AI is also enabling new breakthroughs in virtual and augmented reality devices, as well as humanoid robotic sectors, which are expected to sustain strong demand for advanced semiconductor technologies over the next several years.

Advanced process capacity is projected to maintain a robust 14% CAGR from 2025 through 2028, beginning with 982,000 wpm in 2025, representing 15% YoY growth. The industry is expected to achieve a significant milestone in 2026, surpassing one million wafers for the first time, with capacity reaching 1.16 million wpm.

2nm and below capacity deployment shows even more aggressive scaling throughout the forecast period, with production capacity expanding dramatically from less than 200,000 wpm in 2025 to more than 500,000 wpm by 2028, reflecting the strong market demand driven by AI applications in advanced manufacturing.

The semiconductor industry’s investment landscape remains firmly anchored in advanced process technologies. Capital expenditure on advanced process equipment is forecast to surge to over US$50 billion by 2028, representing a substantial 94% increase from the US$26 billion invested in 2024.

Investment in 2nm and below wafer equipment represents a particularly dramatic expansion, with funding more than doubling from US$19 billion in 2024 to US$43 billion in 2028. A remarkable 120% increase that underscores the industry’s aggressive pursuit of next-generation manufacturing capabilities.