Semiconductor spending seen to increase
According to the 2014 McClean Report, there will be an increase in semiconductor capital expenditure (capex), with market leaders taking the biggest share of investment.
In fact,Samsung,Intel and TSMC together will account for more than half of total semiconductor industry capex this year, IC Insights reported. Samsung and Intel lead the pack with $11billion in spending each this year. Over the next three years, Samsung will spend $35.3billion, with about 60 per cent of the total targeting memory production, IC Insights forecasts. By comparison, Intel is seen to lay out $32.6billion.
Meanwhile,Taiwan Semiconductor Manufacturing Co.(TSMC) is slated to invest slightly less at $10billion. Last year, these three companies took a slightly higher 55.5 per cent share of total spending, compared to $51.8 per cent this year.
Among the rest of the top 10 spenders, the majority will spend at least $3billion in 2014, while nine other suppliers are expected to invest $1billion. Overall, the top 10 spenders are expected to boost overall spending in 2014 over 2013, despite flatline spending in the previous year.
2014 Top 10 Supplier's Semiconductor Capital Spending Forecast
Notably, some organisations are making big increases in spending after cuts in previous years.SanDisk, for example, cut spending by 28 per cent in 2012 and a lesser 12 per cent in 2013. This year, however, the company is expected to increase spending by 86 per cent, the largest increase among the top 10 spenders on the list.
These shifts are part of a bigger pattern in the semiconductor industry. In the past, capacity expansion and fab equipment spending were closely tied, SEMI reported in its SEMI World Fab Forecast released in January. Now, semiconductor makers are spending money to upgrade facilities over spending to build new capacity.
Worldwide Installed Capacity
SanDisk provides a real-world example of this phenomenon. "While SanDisk's capital spending level is expected to be much higher than in 2013, this increased spending is not expected to result in a significant boost to its NAND flash capacity levels," the McLean Report said.
In another hopeful sign, nine out of 10 of the top capital spenders are expected to increase spending in 2014, compared to a figure of three out of 10 for 2013. Outside of the top 10, growth is predicted to be slower, at 3 per cent this year. Last year, though, this group decreased spending by 15 per cent.
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