Fab spending heading for 117 percent growth in 2010

SAN JOSE, USA: According to the World Fab Forecast report released today by SEMI, 2010 spending on worldwide fab projects, including construction, facilities, and equipping, will grow 117 percent over 2009 levels.

Since June 2009, SEMI’s World Fab Forecast has consistently predicted spending growth rate of more than 60 percent for 2010, and the March release indicated growth in the range of 88 percent.

The table shows forecasted fab spending with and without discretes, which includes LED fabs. Construction costs typically account for 15 to 20 percent of total fab spending.Source: SEMI, USA.

The solid-state lighting (SSL) market is picking up. The SEMI World Fab Forecast and the Opto/LED Fab Watch shows that spending for LED-dedicated fabs will surge in 2010.

Spending on LED fabs represented about a 40 percent share of the total discrete fab spending in 2006, but will increase to a 90 percent share (or more) in 2010 and 2011.

Spending resumes
At the beginning of this year, it was clear that only a few companies would spend more than $1 billion each in 2010. This has suddenly changed: some companies have announced record levels of capex plans.

Last year, most capex went for upgrades but this year will show an increase in spending to rebuild and build capacity.

“Total spending on fab projects could approach $36 billion this year (including discretes), well above the estimated $16.4 billion spent in 2009,” said Christian Gregor Dieseldorff, senior analyst of fab information of the SEMI Industry Research and Statistics group. “The 2010 spending recovery, however, remains still substantially below the $46 billion spent in the 2007 peak year.”

In 2009, 29 volume fabs closed, including eleven 200 mm fabs and two state-of-the-art 300 mm fabs. (Several planned fab closures were pushed out to 2010.) As a result of fab closures and historic low spending levels in 2009, installed fab capacity (without discretes) declined to 13.4 million wafers per month (200 mm equivalent), or -3.6 percent.

Based on current capital spending plans, installed capacity (without discretes) is forecasted to grow about 8 percent this year to about 14.6 million wafers per month. Installed capacity for LED fabs is expected to have the strongest growth rate (year-over-year) with 33 percent in 2010 and 24 percent in 2011.

Source: SEMI, USA.