1. Industry start: Continuing the seasonal pattern, AI-driven structural growth
According to the "2025 Q1 Semiconductor Manufacturing Monitoring Report" jointly released by SEMI and TechInsights, the global semiconductor industry will show typical seasonal characteristics in the first quarter of 2025, but the uncertainty of trade policies and the adjustment of supply chain strategies have cast a veil of mystery on the industry trend throughout the year.
From the perspective of market demand, the sales of electronic equipment decreased by 16% quarter-on-quarter, flat year-on-year, in line with the off-season law in the first quarter of previous years. Integrated circuit (IC) sales fell slightly by 2% quarter-on-quarter, but increased by 23% year-on-year, highlighting the continued boom in artificial intelligence (AI) and high-performance computing (HPC) infrastructure investment. This data confirms the industry's transformation trend to computing-intensive applications, with core areas such as AI chips and data center servers becoming growth engines.
2. Capital expenditure: Memory and advanced manufacturing processes lead the investment boom
At the CapEx level, the industry as a whole fell by 7% quarter-on-quarter, but surged by 27% year-on-year, indicating the determination of enterprises to deploy technology in the long term. Among them, memory-related spending soared by 57% year-on-year, and high-bandwidth memory (HBM) became the focus of investment due to the explosion of demand for AI servers. Spending in the non-memory segment also increased by 15% year-on-year, and investment in advanced logic processes (such as sub-3nm nodes) and advanced packaging technologies continued to increase. This structural difference reflects that the industry is coping with the explosive growth in computing power demand brought about by AI through the dual tracks of "memory expansion" and "logic upgrade".
Fab equipment (WFE) spending was the bright spot, growing 19% year-over-year in the first quarter and expected to increase another 12% in the second quarter. Test equipment bills surged 56% year-on-year, and the second quarter is expected to increase by 53%, highlighting the stringent requirements for high-complexity devices such as AI chips and HBM. Packaging equipment also achieved double-digit growth, and high-density integration technologies (such as 2.5D/3D packaging) have become a new battlefield for supply chain competition due to improved chip performance and yield.
Figure: Global semiconductor industry in Q1 2025: Seasonal characteristics and potential changes under tariff uncertainty
3. Capacity expansion: China leads the world, and the regional pattern is dynamically adjusted
Global fab capacity continued to climb, reaching 42.5 million pieces (300mm equivalent wafers) in the first quarter, up 2% quarter-on-quarter and 7% year-on-year. China remains the main driver of capacity expansion, but growth is expected to slow in the coming quarters. It is worth noting that Japan and Taiwan have become the regions with the fastest quarterly production capacity growth: Japan is driven by investment in power semiconductors (such as the demand for IGBT for electric vehicles), while Taiwan is due to the ramp-up of the advanced process production line of a leading foundry, highlighting the regional industrial characteristics and supply chain strategic differentiation.
4. The risk looms: the industry under the tariff cloud "push and pull game"
Although the first quarter was not directly affected by the new tariffs, Clark Tseng, senior director of market intelligence at SEMI, pointed out that the uncertainty of global trade policy has caused a divergence in corporate strategies: some manufacturers are accelerating shipments to avoid potential cost increases, while others are holding off on investment and waiting for policy clarity. This "push-pull effect" may break the traditional seasonal pattern and lead to increased demand volatility in the second half of the year. Boris Metodiev, director of market analysis at TechInsights, further warned that geopolitical risks (e.g., export controls, tariff barriers) could threaten the growth momentum of equipment investment, especially in the advanced process sector that relies on cross-border supply chains.
5. Future outlook: AI illuminates the outlook, and atypical seasonality becomes the new normal
Looking ahead to 2025, the industry needs to find a balance between the demand for AI computing power and the risks of trade policies. AI and data center-related technologies will continue to support the growth of the industry, but traditional fields such as consumer electronics and automotive electronics may experience demand delays or regional shifts due to tariff disruptions. SEMI emphasized that the construction of enterprise supply chain resilience (such as diversified production capacity layout and local supply chain cultivation) will be the key to coping with uncertainty.
Conclusion: Finding certainty in change
From the first quarter of 2025, it can be concluded that the semiconductor industry is in a special period when the traditional off-season and emerging demand pull each other. On the one hand, the growth opportunities presented by AI and advanced manufacturing technologies are clearly visible. On the other hand, the challenges brought about by the adjustment of the global supply chain have also forced enterprises to rethink their layout strategies. For industry participants and investors, it is necessary not only to seize the opportunities in HBM, advanced packaging, power devices and other segments, but also to keep an eye on policy changes and find a path of steady development in the rapidly changing market.
