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Tariffs

Semiconductor Manufacturing Industry Enters 2025 with Atypical Seasonality

Strategic Insights

— 2 min read

The global semiconductor manufacturing industry entered 2025 with typical seasonal patterns, but looming tariff threats and evolving supply chain strategies are expected to create atypical seasonality for several industry segments as the year progresses. Despite heightened trade policy risks, current data for the first quarter of 2025 indicate that electronics and integrated circuit (IC) sales have not been directly impacted by the newly announced tariffs. However, the uncertainty around global trade policies is prompting some companies to accelerate shipments and others to pause investments, leading to a push-pull dynamic that could lead to atypical seasonality for the remainder of the year.

Key Takeaways:

  • Electronics sales declined 16% quarter-over-quarter (QoQ) in Q1-2025, but remained flat year-over-year (YoY), consistent with traditional seasonal patterns.
  • IC sales contracted by 2% QoQ, but posted a robust 23% YoY increase, reflecting ongoing investment in AI and high-performance computing infrastructure.
  • Semiconductor capital expenditures declined 7% QoQ, but surged 27% YoY, as manufacturers continued to invest heavily in leading-edge logic, high-bandwidth memory (HBM) and advanced packaging to support AI-driven applications.
  • Memory-related capex soared 57% YoY in Q1-2025, while non-memory capex expanded by 15% YoY, underscoring the industry's focus on innovation and resilience.
  • Wafer fab equipment (WFE) spending rose 19% year-over-year in Q1-2025 and is projected to increase another 12% in Q2, driven by strong investments in advanced logic and memory production to support the rapid adoption of AI semiconductors.
  • Test equipment billings surged 56% year-over-year in Q1-2025 and are expected to grow by 53% in Q2, reflecting the heightened complexity and stringent performance requirements of AI and HBM chip testing.
  • Assembly and packaging equipment also registered double-digit growth, benefiting from the industry's push toward higher-density integration and advanced packaging solutions.
  • China continues to lead all regions in capacity expansion, though the pace of growth is expected to moderate in the coming quarters.
  • Japan and Taiwan are experiencing the strongest quarterly capacity gains, driven by significant investments in power semiconductor manufacturing in Japan, and the ramp-up of a leading-edge foundry in Taiwan.

Statistics:

  • QoQ decline in electronics sales: 16%
  • YoY change in electronics sales: 0%
  • QoQ decline in IC sales: 2%
  • YoY increase in IC sales: 23%
  • QoQ decline in semiconductor capital expenditures: 7%
  • YoY increase in semiconductor capital expenditures: 27%
  • QoY increase in memory-related capex: 57%
  • QoY increase in non-memory capex: 15%
  • YoY increase in WFE spending: 19%
  • Projected QoY increase in WFE spending: 12%
  • YoY increase in test equipment billings: 56%
  • Projected QoY increase in test equipment billings: 53%
  • Quarterly wafer fab capacity: 42.5 million wafers per quarter (in 300mm wafer equivalents)
  • QoQ increase in wafer fab capacity: 2%
  • YoY increase in wafer fab capacity: 7%

Sources:

  • Q1-2025 Semiconductor Manufacturing Monitor (SMM) Report, SEMI and TechInsights
  • Clark Tseng, Senior Director of Market Intelligence at SEMI
  • Boris Metodiev, Director of Market Analysis at TechInsights
  • Copyright 2025 Cyber Media (India) Ltd., distributed by Contify.com

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