Some Slowdown Observed, though Stronger Construction Spending in 2011
SAN JOSE, Calif. — September 6, 2011 — The SEMI World Fab Forecast indicates that capital expenditure will increase to $41.1 billion in 2011, the highest on record. This new prediction is revised downwards to a 23% increase (from 31% increase predicted in May 2011), as some companies have adjusted plans due to broader economic conditions. Although 2012 spending will decline, the total for 2012 may still be the second highest on record.
“Changes in the global economy affect the semiconductor industry. Economic developments in recent months decreased consumer confidence and spending, and the semiconductor industry has reacted to this slowdown,” said Christian Gregor Dieseldorff, senior analyst of fab information in the SEMI Industry Research and Statistics group.
Source: SEMI World Fab Forecast August 2011
In 2011, SEMI counts 223 facilities spending on equipment. Of these, 77 projects are for LED dedicated facilities. Next year, 190 facilities will start or continue equipping, with 72 LED projects.
The highest spending in 2011 occurs in the Americas with about $10 billion, followed by Taiwan with about $9 billion. The Americas region last led spending in 2002. Although Intel spends the most, another key reason for America’s lead is Samsung’s spending of about $2.5 to $3 billion in their Austin fab, dubbed the “S2-line.” In 2012, Korea is predicted to step ahead of the Americas, with over $10 billion in fab equipment spending, followed by Taiwan at $9.2 billion.
Over the last few months, some companies announced cuts in capex for 2011, but for a number of companies, capex plans remain unchanged. Some announced even slight increases, though caution is becoming more apparent in the market.
As the semiconductor industry adjusts to the market with some spending cuts, the SEMI World Fab Forecast report also predicts that the capacity ramp will slow. 2011 growth of 9.3% (predicted in May 2011) will slow to 6.8%. Looking ahead, the industry may not be able to respond to rapidly increasing demand, for example in the NAND Flash market. It takes about 1.5 years to bring a fab from ground breaking to volume production, so in order to see capacity ramp increase in 2012 or 2013, construction projects must start now.
The SEMI data closely track construction activity, especially for new facilities. Since the May 2011 edition of the Worldwide Fab Forecast, 2011 fab construction project spending (including Discretes and LEDs) has increased from about $4.8 billion to $5.6 billion. In May 2011, 61 construction projects were counted; now, 72 are under way.
The SEMI World Fab Forecast uses a bottom-up approach methodology, providing high-level summaries and graphs; and in-depth analyses of capital expenditures, capacities, technology and products by fab. Additionally, the database provides forecasts for the next 18 months by quarter. These tools are invaluable for understanding how the semiconductor manufacturing will look in 2011, 2012 and 2013, and learning more about capex for construction projects, fab equipping, technology levels, and products. Learn more about the SEMI fab databases at: http://www.semi.org/MarketInfo/FabDatabase and http://www.youtube.com/user/SEMImktstats.
SEMI’s 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.
SEMI is 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 Beijing, Bengaluru, Berlin, Brussels, Grenoble, Hsinchu, Moscow, San Jose, Seoul, Shanghai, Singapore, Tokyo, and Washington, D.C. For more information, visit www.semi.org.
# # #