SEMI, the global industry association for the semiconductor and electronics design and manufacturing supply chain, has released findings from its latest 300mm Fab Outlook report, forecasting significant growth in semiconductor manufacturing capacity through 2028, fueled by the surge in demand for AI applications. The report highlights that global semiconductor production is set to grow at a compound annual growth rate (CAGR) of 7%, reaching a peak of 11.1 million wafers per month (wpm) by the end of 2028.
A major contributor to this expansion is the rise in advanced semiconductor process capacity (7nm and below), which is expected to increase by 69%, from 850,000 wpm in 2024 to 1.4 million wpm in 2028, representing a CAGR of 14%, more than double the industry average.
“AI is a powerful driver reshaping the semiconductor sector, prompting significant investment in advanced manufacturing capacity,” said Ajit Manocha, President and CEO of SEMI. “The rapid growth of AI applications is driving major investments throughout the semiconductor ecosystem, emphasizing the industry’s critical role in advancing technology and meeting the growing demand for next-gen chips.”
The demand for powerful AI training systems to support more complex models is a key factor in this growth. Additionally, AI inference—used in applications like personal assistants and other system software—has become an essential growth driver. AI is also leading to innovations in virtual and augmented reality, as well as humanoid robotics, all of which are expected to maintain strong demand for advanced semiconductor technologies in the coming years.
Advanced process capacity is projected to maintain strong growth, with a 14% CAGR from 2025 through 2028, starting at 982,000 wpm in 2025, a 15% year-on-year increase. By 2026, the industry will surpass a major milestone of one million wafers per month, reaching 1.16 million wpm. Additionally, production capacity for 2nm and smaller nodes is expected to expand rapidly, from under 200,000 wpm in 2025 to over 500,000 wpm by 2028, driven by strong AI-related demand.
Investment in advanced semiconductor manufacturing is poised for significant growth. Capital expenditure on cutting-edge process equipment is expected to exceed US$50 billion by 2028, marking a 94% increase from US$26 billion in 2024, reflecting a solid 18% CAGR. The shift to advanced nodes is accelerating, with 2nm technology expected to enter mass production by 2026, followed by 1.4nm technology in 2028. As demand continues to rise, chip makers are expanding production capacity in anticipation of future needs, with growth rates of 33% in 2025 and 21% in 2027.
A significant portion of this investment will be directed towards 2nm and smaller wafer technologies, which will see their capital spending more than double from US$19 billion in 2024 to US$43 billion by 2028, a remarkable 120% increase.
SEMI® is a global industry association representing over 3,000 member companies and 1.5 million professionals worldwide across the semiconductor and electronics design and manufacturing supply chain. SEMI accelerates collaboration among its members through various programs such as Advocacy, Workforce Development, Sustainability, Supply Chain Management, and more. The organization’s events, technology communities, standards, and market intelligence support its members’ growth and innovation in design, devices, equipment, materials, services, and software, helping to drive smarter, faster, and more secure electronics.
