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SEMI: Fab spending to hit Rs.116,675.06 crore in 2010

Posted: 08 Sep 2009     Print Version  Bookmark and Share

Keywords:semiconductor capex  fab  SEMI report 

Worldwide fab spending is expected to rise 64 per cent in 2010 to reach Rs.116,675.06 crore ($24 billion), thanks largely to about Rs.68,060.45 crore ($14 billion) in planned spending from six chip companies, according to SEMI.

While a 64 per cent increase in fab spending (including the construction and equipping of fabs) sounds impressive, it is important to keep in mind that the increase comes on the heels of historic lows in 2009, cautioned SEMI analyst Christian Gregor, in a report.

Gregor expects six companies—Taiwan Semiconductor Manufacturing Co., GlobalFoundries, Toshiba, Samsung, Intel and Inotera Memories—to account for significantly more than half of worldwide capital spending in 2010. Combined, spending by these six companies is expected to be roughly equal to what total worldwide capital spending will be in 2009 (Rs.68,060.45 crore - Rs.72,921.92 crore), he said.

He added that Samsung's 2010 capital spending is expected to be between Rs.19,445.84 crore and Rs.24,307.31 crore ($4 billion and $5 billion), followed by Intel at Rs.14,584.38 crore to Rs.19,445.84 crore ($3 billion to $4 billion). TSMC and Toshiba are each expected to spend about $2 billion, he said. Gregor estimated that GlobalFoundries and Inotera would each spend about $1 billion.

In 2010, the region spending the most on construction projects will be the Americas, thanks largely to GlobalFoundries' fab project in New York. For equipping facilities, the Americas also lead, followed by Taiwan and Korea, SEMI said.

The six companies projected to lead in capital spending in 2010 account for about 30 per cent of the worldwide share of combined installed fab capacity, according to SEMI. Most of the 2009 and 2010 investments will go to upgrade fabs rather than invest in new fab capacity, SEMI said.

Click on image to enlarge.

The trade group noted that GlobalFoundries capacity is small compared to the other five, but the company is just beginning to ramp up new volume capacity and prepare a new fab.

The economic downturn has taken its toll on worldwide capacity, SEMI said. Not only did spending lag in 2009, but 31 fab closures are expected by the end of the year, according to SEMI World Fab Forecast data. Another 16 fabs are expected to close in 2010, SEMI said.

The average fab utilisation rate reported for the industry dropped to 56 per cent in the first quarter, SEMI said. Although a few companies—such as TSMC—are now running some fabs at 100 per cent utilisation, the overall utilisation rate is still expected to lag at 70 per cent to 80 per cent by the end of 2009, SEMI said.

Click on image to enlarge.

- Dylan McGrath
EE Times

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