The global semiconductor industry is undergoing an unprecedented expansion, with significant growth in manufacturing capacity projected through 2028. According to the latest 300mm Fab Outlook report from SEMI, the industry association serving the global semiconductor supply chain, this surge is largely driven by the escalating demand for generative AI applications. The report indicates that global front-end semiconductor suppliers are rapidly accelerating their expansion efforts to meet these burgeoning needs.

Overall, the global semiconductor manufacturing industry is expected to maintain strong momentum, with total capacity forecast to grow at a compound annual growth rate (CAGR) of 7% from the end of 2024 through 2028. This growth will culminate in a record high of 11.1 million wafers per month (wpm) by the end of the period. A primary catalyst for this expansion is the continuous increase in advanced process capacity, specifically for nodes at 7nm and below. This advanced capacity is projected to expand by approximately 69%, climbing from 850,000 wpm in 2024 to a historic 1.4 million wpm by 2028, representing a robust CAGR of about 14%—twice the industry average.

SEMI President and CEO Ajit Manocha emphasized the transformative role of AI, stating, "AI continues to be a transformative force in the global semiconductor industry, driving significant expansion of advanced manufacturing capacity." He further noted that the rapid proliferation of AI applications is stimulating robust investment across the entire semiconductor ecosystem, highlighting the industry's crucial role in fostering technological innovation and satisfying the immense demand for advanced chips.

Beyond the need for increasingly powerful training capabilities to support larger AI model architectures, AI inference has emerged as another critical growth driver. Market expansion is further fueled by AI's integration into system software for personal assistants and other innovative applications. Moreover, AI is enabling new breakthroughs in virtual and augmented reality devices, as well as humanoid robotic sectors, all of which are anticipated to sustain strong demand for advanced semiconductor technologies over the coming years.

Advanced process capacity is set to maintain its impressive 14% CAGR from 2025 through 2028, starting with 982 thousand wpm in 2025, a 15% year-over-year increase. The industry is on track to achieve a significant milestone in 2026, surpassing one million wafers for the first time, with capacity reaching 1.16 million wpm. The deployment of 2nm and below capacity demonstrates even more aggressive scaling throughout the forecast period, with production capacity dramatically expanding from less than 200 thousand wpm in 2025 to over 500 thousand wpm by 2028, directly 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, marking a substantial 94% increase from the US$26 billion invested in 2024. This trajectory underscores the industry's resolute commitment to next-generation manufacturing capabilities, reflecting an impressive 18% CAGR. The transition to cutting-edge nodes continues to accelerate, with 2nm technology projected to reach mass production by 2026, followed by the commercial deployment of 1.4nm technology in 2028. Chip manufacturers are strategically expanding production capacity ahead of schedule in anticipation of growing market demand, with projected growth rates of 33% in 2025 and 21% in 2027. Investment specifically 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 highlights the industry's aggressive pursuit of next-generation manufacturing capabilities.