February 5, 2007 – Memory manufacturers once again made up the biggest slice (43%) of all capital spending in 2006, and are poised to take the lion’s share of fab spending in 2007 as well, according to data from Strategic Marketing Associates (SMA).

George Burns, SMA president, currently forecasts 2007 total capex at $60 billion, 10% higher than 2006. Only 11 of the 33 fabs coming online in the coming year will be for DRAM or flash, but those chipmakers will be spending more than $27 billion by the time those outfits are fully equipped, two-thirds of the value of all fabs expected to come online in the next 12 months, he said.

Of the eight memory makers with stated 2007 capex plans, all but Samsung are planning to rev up investments, to a total of almost $4 billion in spending this year, Burns noted. And with Japan’s Elpida and Toshiba yet to announce their fiscal plans (based on a March FY calendar), that increase is likely to be even higher, and “the industry may even surpass the previous high water mark of 2000,” he said.

Samsung’s total capex budget for 2007 calls for a 2%-3% decrease, but it’s worth noting that the company announced additional investments at the tail-end of 2006, resulting in a 11% growth in 2006 capex vs. a projected 5% decline.

Memory manufacturers’ announced 2007 capex plans
(US $M)

Company……….2006…………..2007……….Change
Samsung…………….7100……………6955…………-145
Micron*………………2200…………..3625…………1425
Powerchip……………1726…………..2000…………..274
Nanya………………….121…………..1820…………1699
SanDisk………………1125…………..1500…………..375
Inotera……………….1200…………..1300…………..100
Promos……………….1400…………..1220………….-180
Qimonda………………885…………..1240……………355
TOTAL……………..15,757………..19,660………….3903

* Includes IM Flash