Wednesday, March 7, 2012

Equipment spending growth flat in 2012; record fab equipment spending expected for 2013

SAN JOSE, USA: Semiconductor fab equipment spending is expected to remain level (0 percent increase) in 2012 according to the latest SEMI World Fab Forecast report. Eight companies, including Samsung and Intel, will keep their fab equipment spending level above $2 billion in 2012. Fab equipment spending is estimated at $38.85 billion for 2012 and a record $45.50 billion for 2013.

While the outlook for fab equipment spending in 2012 was negative two months ago, key spenders like Samsung increased spending to record levels; Hynix increased spending in 2012 by 23 percent to about US$ 3.75 billion, while UMC increased spending from $1.6 billion to $2.0 billion. In addition, Intel increased spending much more than expected, to a historic high of about $12.5 billion. If macroeconomic factors improve and other companies adjust their capex plans, then equipment spending for 2012 could even cross into positive territory.

Fab Equipment Spending (new and used)Source: SEMI, USA.

The spending trend is expected to continue into 2013 especially for the Foundry, System LSI, MPU and NAND sectors. Companies continue to invest in upgrades and leading edge technologies, and few are ramping up fab capacity. SEMI’s latest World Fab Forecast (February 28, 2012) lists 192 facilities with equipment spending in 2012.

2010 was a good year for fab construction but 2011 was even better with a 24 percent increase YoY to $6.4 billion. For 2012, spending on construction is expected to decline by about 28 percent to $4.5 billion. Data of the World Fab Forecast show an even further decline in 2013.

Coming out of the downturn from 2010 on, yearly capacity growth is 5 to 10 percent and is expected to stay modest for the foreseeable future. However, SEMI’s fab data shows rapid increases in fab equipment spending for some segments leading also to an increase in installed capacity.

While installed capacity for DRAM is expected to level out, Flash capacity is growing rapidly between 2010 and 2013. The dedicated foundry sector will also undergo growth in installed capacity with the key contributors like TSMC, Globalfoundries and UMC. The recently released SEMI Fab database report enables data analysis by technology node, product type, region, company and fab by fab.

Lower construction spending compared to recent years, especially on new fabs, raises some concern about available capacity beyond 2013. Overall, the industry has tried to control installed capacity since coming out of the 2009 downturn. Now due to increasing demand, some segments, such as Flash, Foundry, and System LSI, are experiencing a boost in installed capacity.

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