Forecasters Boost Capital Spending Outlook
By Mark LaPedus
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.
Industry trade group SEMI will likely boost its capital spending forecast. “The World Fab Forecast report will be published end of this month, but we expect equipment spending to be above the flat-line,” said Christian Gregor Dieseldorff, senior analyst of fab information in the SEMI Industry Research and Statistics group. “We expect the second half of this year to be better and we expect 2013 to be record year for equipment spending.”
In its previous forecast, semiconductor fab equipment spending was expected to remain flat, according to SEMI. Fab equipment spending was estimated at $38.85 billion for 2012 and $45.50 billion for 2013, according to the previous forecast, which was issued in March.
Joanne Itow, an analyst with Semico Research Corp., has been more optimistic than others about capital spending for 2012. “Since the beginning of this year, we’ve been flat to up 4 percent,” Itow said.
G. Dan Hutcheson, CEO of VLSI Research, sees a mixed picture despite the upgrade in capital spending. “Within the equipment market, the back-end is seeing a stronger momentum than the front-end after trailing it for much of 2011. Utilization rates at the subcons are rising fast, driven primarily by strong demand in the mobile space amid new product introductions,” he said.
“Even though VLSI’s forecast for IC sales has been unchanged at +4 percent since the beginning of the year, the equipment forecast was upgraded two months ago to -7 percent from -9 percent and will receive another boost in the next update due to several significant increases in capital spending,” he said.
“Most of the hikes took place in the foundry market with TSMC increasing their capex by $2.3 to a whopping $8.3 billion and UMC raising it (to) $2.0 billion for the year. The memory market has also seen some upgrades; Toshiba is planning to spend $1.8 billion in 2012, up 10 percent from the previous year,” he said. “However, most of the spending in the memory market will go to capacity upgrades, not expansions. Clearly, the outlook for the equipment industry has improved considerably this year; however, the momentum can only be sustained if the IC market continues to improve across the board in the second half of the year.”
