April 24, 2006 – The roster of companies spending more than $1 billion is set to expand to sixteen companies, vs. 13 a year ago, with memory firms particularly aggressive in their capacity investments, according to a new report from IC Insights Inc.
According to initial budgets, Intel will retake the top spot among in 2006 with $6.6 billion in capex spending, a 13% increase from a year ago. That number, though, is a reduction from previous projections, due to lower-than-expected demand from the PC sector and rising inventories. No. 2 capex spender Samsung isn’t far behind Intel ($5.7 billion), with investments down about 7% from a year ago.
Most aggressive spenders on the top 10 capex list are Hynix and Powerchip, with year-on-year increases of 48% and 39%, respectively. Powerchip was ranked 39th in semiconductor sales last year, for a 2006 capex/2005 semi sales ratio of 116% — vs. Intel with a ratio of only 19%. Similarly, Hynix also will be aggressively spending in 2006, vaulting to the No. 3 spot with $3.6 billion, likely split between its DRAM and flash memory operations.
IC Insights points out that only one other company probably can be considered an aggressive capex spender in 2006: AMD, which after the spinoff of its Spansion flash business, will concentrate all of its spending on leading-edge MPUs. Also, the analyst firm noted the geographic parity among the top 10 spenders: two companies each from the US, Japan, Europe, South Korea, and Taiwan make up this year’s list.
In all, the top 10 capital spenders will represent 58% of worldwide spending in 2006, up a fraction from 2006 and compared with 53% in 2002. The top five spenders will make up about 42% of total capex outlays, roughly even with a year ago.
TOP TEN CAPITAL SPENDERS’ 2006 BUDGETS
2006 Rank Company Headquarters 2005 ($M) 2006 ($M) 06/05 % change WW ’05 top semi sales rank
1 Intel US 5,818 6,600 13% 1
2 Samsung South Korea 6,160 5,700 -7% 2
3 Hynix South Korea 2,430 3,600 48% 11
4 TSMC Taiwan 2,288 2,700 18% 8
5 Toshiba Japan 2,325 2,400 3% 4
6 Powerchip Taiwan 1,290 1,860 44% 39
7 ST Europe 1,441 1,800 25% 5
8 Sony Japan 1,525 1,550 2% 9
9 Infineon Europe 1,638 1,450 -11% 6
10 AMD US 1,434 1,435 0% 16
¿ Top 10 Total ¿ 26,349 29,095 10% ¿¿
¿¿ Others ¿ 19,636 21,310 9% ¿
¿ TOTAL ¿ 45,985 50,405 10% ¿
Source: IC Insights, Company Reports
THE “BILLION DOLLAR CLUB” FOR CAPITAL SPENDING
2000: Intel, TSMC, ST, Samsung, UMC Group, TI, Motorola, NEC, Hitachi, Fujitsu, Infineon, Toshiba, Philips, Hynix, Sony, IBM, Mitsubishi, Micron.
TOTAL AMOUNT SPENT: $43.2 billion. % OF TOTAL CAPEX: 72%.
2001: Intel, TSMC, Samsung, TI, ST, Infineon, IBM, Micron, UMC Group.
TOTAL AMOUNT SPENT: $20,1 billion. % OF TOTAL CAPEX: 53%.
2002: Intel, Samsung, TSMC, IBM.
TOTAL AMOUNT SPENT: $9.1 billion. % OF TOTAL CAPEX: 34%.
2003: Intel, Samsung, Sony, Toshiba, ST, TSMC, Micron, Renesas.
TOTAL AMOUNT SPENT: $14.4 billion. % OF TOTAL CAPEX: 48%.
2004: Samsung, Intel, UMC Group, TSMC, ST, Toshiba, SMIC, Infineon, Micron, NEC, Hynix, AMD, Sony, TI, Elpida, IBM.
TOTAL AMOUNT SPENT: $31.8 billion. % OF TOTAL CAPEX: 69%.
2005: Samsung, Intel, Hynix, Toshiba, TSMC, Elpida, Infineon, Sony, ST, AMD, TI, Powerchip, Micron.
TOTAL AMOUNT SPENT: $30.6 billion. % OF TOTAL CAPEX: 67%.
2006 (budgeted): Intel, Samsung, Hynix, TSMC, Toshiba, Powerchip, ST, Sony, Infineon, AMD, Elpida, TI, Micron, SMIC, Fujitsu, UMC Group.
TOTAL AMOUNT SPENT: $36.1 billion. % OF TOTAL CAPEX: 72%.
Source: IC Insights