IC Insights: Semi Capex to Exceed $60 Billion
IC Insights Inc. boosted its forecast for semiconductor industry capital spending in 2011 to $60.4 billion, a 17 percent increase over the $51.8 billion the industry spent in 2010, and increase again in 2012 to $63.3 billion, a new all-time high.
Bill McClean, president of the market research firm, said foundries will continue to invest for capacity expansions and new technologies. DRAM and flash suppliers also are scaling, requiring increased investments.
The top 10 spenders will increase outlays by 25% this year, while the rest of the semiconductor industry is expected to cut their capital expenditures by 1 percent in 2011.
Samsung invested $10.9 billion in its semiconductor business last year, with about 71% going toward memory. “The $10.9 billion figure alone represented 21% of the total semiconductor industry spending last year and was only slightly less than the combined expenditures of Intel and TSMC,” McClean said. Samsung is planning to keep its spending above the $9 billion level in 2011 while allocating about 56 percent of its semiconductor capital spending for memory products, McClean said.
“It is incredible to look at Samsung’s combined spending from 2010 and its budget for 2011. Taken together, the company is expected to allocate over $20 billion in semiconductor capital expenditures in just two years time. This spending is the equivalent to constructing five $4 billion leading-edge 300-mm wafer fabs,” McClean said.
The large jump in capital expenditures in 2010, and the spending amounts forecast for 2011, “should not be considered excessive,” he said. Capital spending as a percent of sales was only 16 percent in 2010, the second lowest level on record, with 2011 spending as a percent of sales forecast to be 17%. The ratio of capital spending to semiconductor sales is expected to stay in a narrow range of 14-17 percent over the next five years.
Source: IC Insights, Company Reports
Tags: capital expenditures, Samsung