SEMI Lowers Capex Outlook, Says Record in Reach
SAN JOSE — SEMI has lowered its semiconductor fabrication capital expenditure forecast for 2011, but maintains this year will set a record for investment.
The trade group said capex spending will increase 23% to to $41.1 billion in 2011. The revised forecast is eight percentage points lower than the 31% hike predicted in May. SEMI cited adjusted plans by some companies due to broader economic conditions.
The group further expects 2012 spending to decline but 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.
