SEMI: Global IDM and Foundry Utilization Below 80%

On November 1, 2023, SEMI (the International Semiconductor Industry Association) unveiled the sales data for semiconductor equipment in North America for the month of September 2023. The results indicate that both front-end wafer equipment and back-end testing equipment sales faced challenges. The report reveals that in September, sales of front-end wafer equipment in North America amounted to $3.34 billion, marking a 3% increase compared to the previous month but a substantial 18% decline when compared to the same period in the previous year. Concurrently, sales of back-end testing equipment reached $243 million, reflecting a 2% decrease from the previous month and a noteworthy 25% decrease year-over-year.

SEMI's data highlights a subdued trend in North American semiconductor equipment orders, with global IDM and foundry capacity utilization slipping to below 80% during Q3 2023 and anticipated to reach a low point in the fourth quarter. However, the third quarter of 2023 witnessed continued growth in overall investment in the IC industry. Notably, investments persisted in areas such as CoWoS packaging, 2/3nm technologies, and HBM, while other orders were temporarily deferred. SEMI anticipates a decrease in total investments for non-memory chips in the latter half of 2023.

Furthermore, it is noteworthy that both global semiconductor revenue for August, as reported by WSTS/SIA, and the September Purchasing Managers' Index in the United States showed progressive monthly improvements. Companies had previously amassed significant inventories, necessitating inventory depletion before capital expenditures can be elevated. This phenomenon offers insight into the subdued performance of North American semiconductor equipment orders.