2010 will be a banner year for the equipment and materials industry, according to SEMI, the trade body for the semiconductor production equipment and materials industry.
“Fab spending will double this year”, says Christian Gregor Dieseldorff, SEMI’s research guru, who expects fab spending to grow 117% this year.
Nine companies are expected to spend over $1bn on fab:
Samsung 7.6
TSMC 4.7
Intel 3.6
Glofo 2.7
Flash Alliance
Toshiba/SanDisk) 2.1
Hynix 2.1
Inotera
(Micron/Nanya) 1.5
UMC 1.4
Despite the strong increase in capex this year, the 2010 equipment spend of $31bn is still below 2007 spending ($38bn) and 2006 spending ($34bn). Next year’s expected spend of $37bn is still lower than the 2007 level.
There’s concern that certain equipment may not be able to meet the sudden rush in demand. The supply chain may be stretched and will have a hard time meeting the 100 percent or so growth. This bottleneck may slow down expansion and upgrade plans. Chip companies may compete fiercely for the services of equipment makers.
Last year the industry underinvested, says Dieseldorff. This year, spurred by business growth, robust demand, and strong chip prices, many companies have launched aggressive expansion plans.
Most of the investments in 2010 are still for upgrades but we see investments for new capacity to increase. Foundries are expected to show an increase of installed capacity, growing 13%year over year from 2009 to 2010, and another 11% by 2011.
After a year of memory loss (installed capacity decreased by more than -8 percent Year-over-Year in 2009), memory companies are starting to regain their position, with Installed capacity for memories growing 8% from 2009 to 2010, and an additional 8% in 2011. Capacity for logic and analogue, however, will grow less than 5 percent in 2010.
The growth rate for capacity for the LED industry is phenomenal with strong double-digit growth rates (year-over-year). LED capacity growth is expected to be more than 3 times higher than for memory and 2 times higher than foundry this year and next year.
Spending on LED fabs represented about 40% share of the total discrete fab spending in 2006, but will increased to a 90% share or more in 2010 and 2011.