July 10, 2006 – Suppliers of semiconductor manufacturing equipment can look forward to solid 19% growth in sales to fabs this year, and another 10% in 2007, reaching levels not seen since the 2000 boom, according to new projections from Strategic Marketing Associates (SMA).
In its latest “FabFutures” report, which forecasts quarterly spending and capacity increases for more than 200 leading-edge wafer fabs worldwide, the analyst firm projects semiconductor equipment and materials purchases will top $40 billion in 2007, while overall capital spending by wafer fabs worldwide will reach an all-time high of $62 billion.
Credit a wave of new fab construction since 2004, particularly in the US, for the strong double-digit growth over the next two years, according to George Burns, president of SMA. “We see the industry bringing 35 new fabs online by end of 2007, with a total equivalent capacity, when fully ramped, of more than two million 200mm diameter wafers/month,” he stated. That’s more than 15 acres of silicon, and roughly equal to 18% of the industry’s current theoretical full capacity, he added.
Most of the new capacity and spending will be for 300mm wafers, and particularly for DRAM and flash memory. As many as 14 new fabs are expected to come online next year — two-thirds of which will be for memory, led by the Toshiba-SanDisk joint venture, Flash Partners, as well as facility investments from Samsung, Nanya, Inotera, and the Micron-Intel joint venture IM Flash, according to SMA. The firm projects memory firms alone will spend upwards of $20 billion next year to equip their new facilities.
Collectively, the Asia-Pacific region remains the biggest spender for semiconductor manufacturing facility construction and equipment investments, but as a country the US will remain the biggest individual spender. Burns pointed to a new greenfield fab being planned by AMD in upstate New York, which could begin construction within the next year, as well as additional investments into existing domestic facilities by foreign chipmakers including Samsung and Qimonda (the former Infineon memory unit). US wafer fab construction accounted for 30% of all new building efforts domestically and offshore from 2000-2004, and 20% from 2005-2006. Over the past decade, US companies have accounted for construction of more than 100 fabs, with total equipped value of $74 billion, roughly 24% of the worldwide total, noted Burns. Taiwan and Japanese companies were the next biggest investors in chipmaking facilities, both at 19% of the worldwide total.