What is the expected growth rate for the DRAM industry in 2021 
ns are driving increasing silicon consumption. I'll highlight three examples.
Cloud service providers are forecasting data center capex growth of more than 15% this year on top of record spending in 2020. With the broader adoption of 5G handsets, silicon content in smartphones is growing at double-digit rates. And in automotive, where there are known supply shortfalls, total semi consumption is expected to expand more than 15% this year, translating these factors to industry investments. In foundry/logic, leading-edge investments are very strong and have been well articulated by our customers.
On top of that, our ICAPs business that serves the IoT, communications, auto, power and sensor markets is expected to grow even faster and is on track to exceed $3 billion of revenue for the fiscal year. And then 2020 was a strong recovery year with spending up more than 30%. And in 2021, we expect customers to invest at modestly higher levels. In DRAM, supply demand fundamentals look more favorable than NAND.
And as a result, we still expect DRAM investments to outgrow NAND this year. All of this adds up to a very strong demand environment for wafer fab equipment, and we believe this strength is sustainable well beyond 2021. Digital transformation touches every sector of the economy and is nondiscretionary for many industries. In addition, industry investments appear disciplined.
When you look at wafer fab equipment intensities, that's wafer fab equipment revenues as a percentage of semiconductor industry revenues, they are well below recent peaks in all three of the device segments: foundry/logic, NAND and DRAM. Turning to Applied's business performance. Our semiconductor systems revenues for the first fiscal quarter were up 26% compared to the same period last year. At the midpoint of our Q2 guidance, semi systems will be up around 50% year on year.
And based on our current outlook, we expect to again grow faster than the market for the year as a whole. There are a number of factors contributing to this outstanding performance. First, our business is very well balanced across devices and customers. Second, we have the broadest portfolio of products and capabilities, spanning materials creation, modification, removal and analysis.
These technologies, combined with our ability to connect them in unique ways, are fundamental to enabling our customers' power, performance and cost road maps. And third, we have an incredible pipeline of new products and integrated solutions that are winning applications, expanding our served opportunities and reducing the time it takes our customers to bring important new innovations to market. Node-over-node opportunity growth in both foundry/logic and memory favors Applied's leadership businesses, including epi, thermal processing, CMP and PVD. In fact, we believe our PVD business can grow more than 40% this year and generate more than $3 billion of revenue.
Our latest-generation products have strong momentum, and more than 25% of our 2021 revenues will come from critical applications that we've targeted and won since 2018. Some highlights include CVD, where we grew revenues 30% in 2020 and have strong customer pull for new, differentiated material solutions that are highly enabling for advanced patterning; conductor etch, where we're winning new applications in DRAM and foundry/logic that contributed to our 32% revenue growth in this market last year; process diagnostics and control, where we believe we can grow more than 25% this fiscal year on top of the 45% growth we delivered in 2020, thanks to new optical wafer inspection and e-beam products that are still in the early stages of adoption; in packaging, where we expect revenues to be up 50% year on year on top of strong growth in 2020. Also, over the past few years, we've started introducing a new class of highly differentiated products that we call Integrated Materials Solutions, or IMS. Our IMS products can combine multiple process technologies with onboard metrology and sensors within a single system that are capable of enabling unique films
ns are driving increasing silicon consumption. I'll highlight three examples.
Cloud service providers are forecasting data center capex growth of more than 15% this year on top of record spending in 2020. With the broader adoption of 5G handsets, silicon content in smartphones is growing at double-digit rates. And in automotive, where there are known supply shortfalls, total semi consumption is expected to expand more than 15% this year, translating these factors to industry investments. In foundry/logic, leading-edge investments are very strong and have been well articulated by our customers.
On top of that, our ICAPs business that serves the IoT, communications, auto, power and sensor markets is expected to grow even faster and is on track to exceed $3 billion of revenue for the fiscal year. And then 2020 was a strong recovery year with spending up more than 30%. And in 2021, we expect customers to invest at modestly higher levels. In DRAM, supply demand fundamentals look more favorable than NAND.
And as a result, we still expect DRAM investments to outgrow NAND this year. All of this adds up to a very strong demand environment for wafer fab equipment, and we believe this strength is sustainable well beyond 2021. Digital transformation touches every sector of the economy and is nondiscretionary for many industries. In addition, industry investments appear disciplined.
When you look at wafer fab equipment intensities, that's wafer fab equipment revenues as a percentage of semiconductor industry revenues, they are well below recent peaks in all three of the device segments: foundry/logic, NAND and DRAM. Turning to Applied's business performance. Our semiconductor systems revenues for the first fiscal quarter were up 26% compared to the same period last year. At the midpoint of our Q2 guidance, semi systems will be up around 50% year on year.
And based on our current outlook, we expect to again grow faster than the market for the year as a whole. There are a number of factors contributing to this outstanding performance. First, our business is very well balanced across devices and customers. Second, we have the broadest portfolio of products and capabilities, spanning materials creation, modification, removal and analysis.
 These technologies, combined with our ability to connect them in unique ways, are fundamental to enabling our customers' power, performance and cost road maps. And third, we have an incredible pipeline of new products and integrated solutions that are winning applications, expanding our served opportunities and reducing the time it takes our customers to bring important new innovations to market. Node-over-node opportunity growth in both foundry/logic and memory favors Applied's leadership businesses, including epi, thermal processing, CMP and PVD. In fact, we believe our PVD business can grow more than 40% this year and generate more than $3 billion of revenue.
Our latest-generation products have strong momentum, and more than 25% of our 2021 revenues will come from critical applications that we've targeted and won since 2018. Some highlights include CVD, where we grew revenues 30% in 2020 and have strong customer pull for new, differentiated material solutions that are highly enabling for advanced patterning; conductor etch, where we're winning new applications in DRAM and foundry/logic that contributed to our 32% revenue growth in this market last year; process diagnostics and control, where we believe we can grow more than 25% this fiscal year on top of the 45% growth we delivered in 2020, thanks to new optical wafer inspection and e-beam products that are still in the early stages of adoption; in packaging, where we expect revenues to be up 50% year on year on top of strong growth in 2020. Also, over the past few years, we've started introducing a new class of highly differentiated products that we call Integrated Materials Solutions, or IMS. Our IMS products can combine multiple process technologies with onboard metrology and sensors within a single system that are capable of enabling unique films