Intel Ups 2012 Capex Budget to $12.5 Billion
By David Lammers
Intel Corp. said Thursday its capital spending for 2012 is expected to be $12.5 billion, plus or minus $400 million, with “more than a third” of the 2012 capex going into new buildings aimed largely at 14nm production.
Stacy Smith
Intel chief financial officer Stacy Smith said 2012 equipment spending — separate from fab construction — is likely to be less than in 2011, when Intel spent $10.8 billion in capital expenditures. While spending on buildings will decline in 2013, overall capital expenditures next year are likely to depend on how many units Intel can sell.
“If there is a big increase in units, capex will go up,” Smith said, adding that represents a “more traditional” approach to capital spending. The major construction projects for the D1X fab in Oregon and Fab 42 in Arizona “will start to taper off” next year, he added. Intel will continue its strategy of having four large fabs ramp volumes at a particular technology node, Smith said during a conference call following release of the company’s Q4 and full year financial results.
CEO Paul Otellini said 2010 was the first year for Intel’s revenues to exceed $40 billion, while sales went past $50 billion for the first time in 2011. Otellini said the 22nm Ivy Bridge products would begin to ship in “early Spring,” which would represent a slight delay from Intel’s normal two-year product cycle. Those products will deliver improved graphics and other performance advantages compared with the company’s 32nm processors, he said.
Intel’s 2011 revenue was $54 billion, up 24% from 2010, and Smith said 2011 was “by far our most profitable year” with net profits of $12.9 billion. The 2011 revenues were $19 billion higher than in 2009, justifying the higher capital expenditures in 2011 and 2012, he said.
Intel is producing its first 22nm wafers now, Smith said, and the per-wafer production costs will follow the normal learning curve. That may allow Intel to have higher margins in the second half as yields improve on its “Core” microprocessors for personal computers and data center products. Intel had more than $10 billion in revenues from ICs sold into data centers, including servers, storage products, and networking.
Smith noted that by adding graphics capabilities to its processors made on the company’s leading-edge process technology, Intel was able to gain revenues which “paid for the higher capex required.”
R&D spending this year is expected to be about $10.1 billion, up 21% from 2011. Intel’s R&D budget, Otellini said, will be aimed across the product spectrum, at processors for Ultrabooks, data centers, smart phones and tablets, with more highly integrated SoCs developed for mobile products.
Tags: 14nm, 22nm, Intel, Ivy Bridge, semiconductor manufacturing
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The IC business climate continues to improve in 2012, prompting various firms to raise their respective capital spending forecasts. Total semiconductor capital spending is now projected to hit $56.5 billion in 2012, nearly flat from the previous year and almost $6 billion higher than the January outlook, according to a new forecast from VLSI Research Inc.