Fab Capacity Back in the Black: Up 8% Annually
Fab Spending to Increase by 18% in 2011, but Uncertain Outlook for New Fab Construction
SAN JOSE, Calif. — December 7, 2010 — According to the latest edition of the World Fab Forecast, SEMI predicts 8 percent annual growth in installed fab capacity for 2010 and 2011 and about 9 percent for 2012. This projection is based on input of announced capacity plans and other analysis regarding needed fabs investments. These increases are modest compared to double-digit growth rates seen each year from 2003 to 2007.
Looking at year-over-year capacity growth by industry segment since 2004, the LED segment stands out — with double-digit installed capacity growth rates for the past six years. In the past, the Memory segment led growth, with growth rates twice as high as foundries. Through 2012, Memory capacity is expected to increase at the same rate as foundries.
Fab spending is expected to increase by 18.3 percent in 2011 and by 9.5 percent in 2012 as a result of on-going technology upgrades and continued capacity growth, especially for Memory, Foundries and MPU. Total fab spending for 2011 is pulled down by an 11 percent drop in spending on construction projects. This trend will accelerate in 2012, with a currently uncertain outlook for new fab construction starts.
While spending on construction projects declines, spending on Fab Equipment is forecast to rise 23 percent, reaching about $40 billion in 2011. With $40 billion in equipment spending, 2011 will surpass the spending levels of 2007, showing the highest spending on fab equipment in the 19-year history of the SEMI World Fab database. For 2010, the industry segment with the most growth in equipment spending will be Memory, followed by foundries and MPU.
“A sharp decline in the number of new fabs being built in 2011 and 2012 raises some concerns for the industry,” said Christian Gregor Dieseldorff, senior analyst of fab information of the SEMI Industry Research and Statistics group. “It takes 18 to 24 months to plan, construct, equip, qualify, and ramp a new fab. The industry may not have enough capacity in the next two years, as new fabs slowly come on line.”
Many companies seem to be waiting for additional proof that the market has stabilized. In the NAND market, one of the largest growth segments, new applications and electronic devices will result in increased demand. Lower prices for NAND will even accelerate this demand and stimulate continued growth.
The SEMI World Fab Forecast report uses a bottom-up approach as methodology, providing from high-level summaries and graphs; in-depth analyses of capital expenditure, capacity, technology and products; down to the detail of each fab; and forecasts for the next 18 months by quarter. These tools are invaluable for understanding how 2011 and 2012 will look, and learning more about capex for construction projects, fab equipping, technology level, and products.
The SEMI Worldwide Semiconductor Equipment Market Subscription (WWSEMS) data tracks only new equipment. However, the 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, whether new equipment, used equipment, or in-house equipment.
SEMIis the global industry association serving the manufacturing supply chains for the microelectronic, display and photovoltaic industries. SEMI member companies are the engine of the future, enabling smarter, faster and more economical products that improve our lives. Since 1970, SEMI has been committed to helping members grow more profitably, create new markets and meet common industry challenges. SEMI maintains offices in Austin, Beijing, Bengaluru, Berlin, Brussels, Grenoble, Hsinchu, Moscow, San Jose, Seoul, Shanghai, Singapore, Tokyo, and Washington, D.C. For more information, visit www.semi.org.
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