SEMI, the association of chip design and manufacturing companies, forecast China will remain the leader in global chip equipment spending despite an expected double-digit decline this year from a peak of $50 billion in 2024.

The group predicts China’s spending in the sector will drop 24 per cent to $38 billion in 2025, with a 5 per cent decline to $36 billion in 2026.

Overall global fab equipment capex is predicted to increase 2 per cent to $110 billion in 2025 and 18 per cent to $130 billion in 2026. The projected growth will be driven by rising demand from the high-performance computing (HPC) and memory sectors to support data centre expansion and for chips running on edge devices.

SEMI president and CEO Ajit Manocha highlighted the forecast “signals an urgent need for intensified workforce development initiatives” in 2025 and 2026 to deliver skilled workers necessary for the approximately 50 new fabs expected to come online.

Investment by Korean chipmakers is forecast to grow 29 per cent to $21.5 billion in 2025 and 26 per cent to $27 billion in 2026, placing it second.

Taiwan is on track to secure third place with spending reaching $21 billion in 2025 and $24.5 billion in 2026.

Spending in the memory segment is expected to grow 2 per cent to $32 billion by end-2025 and 27 per cent in 2026.