Double-Digit Growth in 2017?
A slow but positive 2016 followed by double digits in 2017
By Christian G. Dieseldorff, Industry Research & Statistics Group at SEMI (March 14, 2016)
In 2015, SEMI tracked over 270 fab equipment projects (new and used). Fab equipment spending for the year ended almost flat, with a slight decrease of -0.4 percent year-over-year. This is expected to change in 2016, with 3.7 percent growth forecast in 2016, followed by a robust 13 percent growth in 2017.
SEMI’s World Fab Forecast report presents details of fab-related spending through the industry and extends the outlook through the end of 2017. Fab equipment spending is expected to pick up slowly in the first half of 2016, and accelerate into the second half when momentum starts to build for 2017 and a return to double-digit growth rates (see figure 1).
Figure 1: Fab equipment spending over time.
3D NAND, 10nm, DRAM Driving Forces
The biggest contributors to this growth are foundries, 3D NAND fabs, and companies beginning to equip and prepare for the 10nm ramp-up in 2017.
Dedicated foundries continue to represent the largest spending segment. Spending for 2015 dropped slightly from $10.7 billion to $9.8 billion (-8 percent YoY), but is expected to increase by 5 percent in 2016 and almost 10 percent in 2017.
DRAM spending ranks second place after foundries. After a strong 2015, DRAM spending is expected to slow in 2016 (-23 percent) and increase again in 2017 by 10 percent.
In terms of spending growth rates, the big momentum comes from 3D NAND (including 3D XPoint). Spending doubled from about $1.8 billion in 2014 to $3.6 billion in 2015, 101 percent growth. In 2016, it will again rise to more than $5.6 billion (50 percent growth), and even higher in 2017 to reach $7.4 billion (30 percent growth).
Companies Increase Capex in 2016
The increase in equipment spending is also supported by six companies, which are among the top 10 spenders globally, and announced plans to increase their respective capital expenditures in 2016 while the assumption for the largest spender, Samsung, is that capital expenditure will be less than in 2015.
24 New Fabs/Lines Begin Construction
Equipment spending growth for 2017 is also buoyed by new 24 facilities (excluding R&D) which began construction in 2015 or will begin construction this year. These projects are located around the world, including eight planned in China alone (see figure 2).
Figure 2: New Fabs/Lines starting construction in 2015 and 2016 (excluding small R&Ds)
It takes typically 1 to 1 ½ years from the onset of construction to begin equipping a fab. Fabs starting construction in 2015 will equip in 2016 or later; fabs beginning construction in 2016 will equip in 2017 or later. The table above includes five LED, five Memory, and seven Foundry fabs. Fourteen facilities are for 300mm fabs and four are for 200mm fabs. The recently announced new 3D NAND fab by Toshiba is expected to begin construction in 2017 with equipment spending starting about one year later.
The industry has recently set records for mergers and acquisitions, and more are expected in 2016. The combined flat growth for semiconductor equipment spending in 2015 and slow growth in 2016 confirms a more mature industry. New technologies — new nodes and newer memory devices — will drive the increase in spending currently forecasted for 2017. This forecast is supported by over 230 fabs equipping for upgrades or capacity addition tracked in the SEMI World Fab Forecast report. Based on these findings, SEMI expects a slow but positive spending outlook for 2016 and a stronger outlook for 2017.
To learn how semiconductor manufacturing will look in 2016 and 2017 and details about capex for construction projects, fab equipping, technology levels, and products, order the SEMI World Fab Forecast Report. The report, in Excel format, tracks spending and capacities for over 1,100 facilities including over 60 future facilities, across industry segments from Analog, Power, Logic, MPU, Memory, and Foundry to MEMS and LEDs facilities. Using a bottoms-up approach methodology, the SEMI Fab Forecast provides high-level summaries and graphs, and in-depth analyses of capital expenditures, capacities, technology and products by fab.
The SEMI Worldwide Semiconductor Equipment Market Subscription (WWSEMS) data tracks only new equipment for fabs and test and assembly and packaging houses. The SEMI World Fab Forecast and its related Fab Database reports track any equipment needed to ramp fabs, upgrade technology nodes, and expand or change wafer size, including new equipment, used equipment, or in-house equipment. Also check out the Opto/LED Fab Forecast. Learn more about the SEMI fab databases at: www.semi.org/MarketInfo/FabDatabase and www.youtube.com/user/SEMImktstats
San Jose, California
March 14, 2016