Record low capital spending as a percent of sales ratios will lead to much stronger IC average selling prices (ASPs) beginning in 2010, and extending through 2012, says US analyst IC Insights.
Capital spending as a percent of semiconductor sales reached a record low of 16% in 2008.
With only three companies spending $1bn or more for capital equipment in 2009, this ratio is forecast to move lower, to about 12% this year.
The three companies, Intel, Samsung and TSMC, will account for 43% of the semiconductor industry’s total capex this year.
As a measure of how the semiconductor industry has changed during this decade, back in 2000, 18 companies spent at least $1bn each on capex. As late as 2007, 16 companies were spending $1bn on capex. Last year, however, the number of billion dollar spenders shrank to eight, and now, this year, it will be only three.
[click to expand]
See also: Mannerisms, the blog of David Manners. Updated twice daily, it's the distinctive, entertaining, authoritative and never dull commentary on the semiconductor industry, from someone who knows. Sign up for the Mannerisms eNewsletter.