"Two Years' Worth of Orders in One Year"... South Korean Equipment Orders Surge Amid Fab Expansion Race

South Korean Semiconductor Equipment Suppliers' Order Backlogs on the Rise
AI-Driven Capacity Expansion Race Fuels Equipment Demand
Samsung, SK hynix Fab Expansions to Boost Domestic Demand Over the Medium to Long Term

Orders are pouring into South Korea's semiconductor equipment industry amid a race to expand AI semiconductor production. As major global semiconductor companies with production bases around the world rush to procure equipment, requests to bring delivery dates forward are also coming in one after another.

According to the semiconductor industry on Oct. 21, Company A, a domestic front-end equipment supplier, has recently received requests from major global customers to expedite equipment deliveries. "This year, they're buying within one year equipment volumes they would normally purchase over two years," a Company A official said. "Supply can't keep up with demand, and we're having to consider which customers to supply first, both domestic and global."

Backlogs at major equipment suppliers have also surged. The combined order backlog of five companies—TES, Wonik IPS, Eugene Technology, Unisem, and Park Systems—rose from KRW 532.7 billion in the fourth quarter of 2025 to KRW 808.8 billion in the first quarter of 2026 and KRW 1.2185 trillion in the second quarter. Backlogs increased by around 50% quarter over quarter for two consecutive quarters.

Global Heavyweights: "We Need Equipment Faster"

The increase in orders is driven by expanded AI semiconductor production and investment in advanced processes. Global semiconductor companies are building factories and expanding capacity in multiple countries at the same time, generating a steady stream of orders for domestic equipment suppliers.

Semiconductor Equipment and Materials International (SEMI) forecast that construction will begin this year on 20 new 300-mm fabs or production lines worldwide, with another 18 expected to start construction next year. TSMC recently said it is working on around 20 fab construction projects around the world. Micron is also investing in memory and advanced packaging facilities in the United States, Japan, Singapore, Taiwan, and elsewhere.

"Around 50 fabs are currently being built simultaneously around the world," an official from another equipment supplier, Company B, said. "It appears that companies building large fabs are increasing their orders." The official added, "With supply limited, we're weighing each customer's business outlook and profitability, among other factors."

Increased HBM production is another factor driving demand for equipment. HBM requires more wafers than conventional DRAM to achieve the same output, as well as additional equipment for stacking and packaging.

Domestic Expansions Ahead... Equipment Investment Set to Grow

Domestic investment by Samsung Electronics and SK hynix is also expected to support orders over the medium to long term. Samsung Electronics is rushing to build its first mass-production line at P5 in Pyeongtaek. SK hynix is bringing forward the mass-production schedule for M15X in Cheongju and investing with the goal of opening the cleanrooms at the first fab in its Yongin Semiconductor Cluster in early 2027.

If plans to develop a semiconductor cluster in the Honam region also move forward in earnest, domestic equipment suppliers could have more opportunities to win orders. However, because there is a time lag between factory construction and equipment installation, actual ordering schedules will vary depending on each customer's investment plans.

SK Securities said, "Following infrastructure development to secure cleanroom space in 2025–2027, a capital expenditure cycle centered on equipment investment is expected to continue in 2027–2029."

This content was produced with the assistance of AI translation services.