Annual capital spending by ten major global semiconductor companies is expected to grow 7% to USD 135 billion, the first rise in three years, driven by suppliers of advanced chips for the generative artificial intelligence boom, Nikkei research shows.
Six of the ten companies, including Taiwan Semiconductor Manufacturing Company (TSMC), South Korea’s SK Hynix, US-based Micron Technology, and China’s Semiconductor Manufacturing International Corporation (SMIC), plan to spend more this fiscal year than in fiscal 2024.
TSMC, the world’s largest chip foundry, plans to break ground on or start up plants in nine locations worldwide in 2025. Recent years have seen about three to five starts per year, mainly in Taiwan, but its fiscal 2025 plans extend to the US, Europe, and Japan. The company expects to spend USD 38 billion to USD 42 billion, up roughly 30% from a year earlier.
At its Arizona site, TSMC plans to invest in expansion to mass produce cutting-edge chips. The company is also looking to start work on a German facility with an eye toward mass production in 2027. Construction of a second plant at its Kumamoto site in Japan is set to begin later this year.
TSMC boasts a commanding lead in cutting-edge chips for AI processing, both in performance and yield, helping it win orders from chip designers Nvidia and Advanced Micro Devices (AMD). In Taiwan, the chipmaker will invest in backend processing, a bottleneck for AI chip output.
In memory chips, Micron is investing around USD 14 billion in the fiscal year ending this month, a 70% jump on the year. This includes increased spending on high-bandwidth memory for generative AI. The company is installing extreme ultraviolet lithography equipment at its Hiroshima plant in Japan, aiming to start shipping next-generation memory in 2026.
SK Hynix, the top player in high-bandwidth memory, is stepping up investment in its home market, lifting capital spending to a three-year high.
The chip market is expected to enjoy AI-driven growth for the next few years. AMD expects the AI semiconductor market to more than triple in size from 2025–2030, reaching USD 500 billion. By contrast, analysts at Deloitte Tohmatsu Consulting and elsewhere see growth in the smartphone market staying in the low single digits from 2025 onward.
Meanwhile, Intel, which has logged net losses for six straight quarters, is cutting capital spending by roughly 30% in 2025 to around USD 18 billion, less than half of TSMC’s figure. With rivals such as Nvidia leading in sales of AI chips, Intel is putting more money into research and development instead.
Samsung is moving forward with mass production of advanced chips at a new Texas facility, but it is paring down investment in South Korea as the memory market slumps. A South Korean brokerage expects the company to spend about USD 35 billion in 2025, on par with last year.
Power semiconductors, which regulate power usage and had been expected to benefit from rising electric vehicle demand, are now in a supply glut as EV sales have slowed. Switzerland’s STMicroelectronics plans to invest USD 2.0–2.3 billion this year, down from USD 2.5 billion in 2024. Germany’s Infineon Technologies is reducing its spending for the fiscal year ending in September.
Some of the chip investment is being driven by countries’ efforts to cultivate homegrown semiconductor supply chains in response to US-China tensions and American tariffs.
US-based GlobalFoundries said in June it would invest USD 16 billion in its home country over the medium to long term, USD 3 billion more than previously planned.
SMIC, China’s biggest chip foundry, plans a record USD 7.5 billion in capital spending this year.
China as a whole is poised to invest over USD 100 billion in chipmaking equipment over the next three years, according to industry group SEMI. Having imported much of this gear from Japan and the Netherlands, China is now stepping up domestic procurement in response to US export restrictions.
In total, chipmakers plan to build 108 new plants from 2025 to 2027, 30% more than in 2021 to 2023, according to industry association SEMI.
“Companies will start competing for orders, and price competition will intensify,” said SMIC co-CEO Zhao Haijun.
Tomoyuki Yatabe at the Mitsubishi Research Institute said oversupply is a possibility for some types of semiconductors.
Suppliers are starting to adjust. Chipmaking equipment manufacturer Tokyo Electron has downgraded its sales forecast for the six months through next March, citing changing investment plans among some customers.
“Semiconductor demand itself hasn’t decreased,” Tokyo Electron president Toshiki Kawai said. “As technological innovation progresses, we can anticipate further growth.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.