Analyst: Top capex budgets expanding two-thirds in 2010

March 4, 2010 –  The biggest chipmaker spenders are taking an extra few crumbs from the capex pie plate in 2010, spending far more than the industry average — but in the end IC prices will still go up and shortages will happen before the year is through, according to IC Insights.

The top 10 capital spenders will account for 66% of capex this year (up from 55% they held in 2005), with the top three (Samsung, Intel, and TSMC) making up more than half of that (38% of total). The top 10 also will increase their spending by a collective 66% this year vs. an anticipated 51% for the industry as a whole. Take Intel out of the equation and the top nine will see their capex spike 91%.

Some commentary of individual company spending plans offered by the analyst outfit:

Samsung: Returning to the top of the spender list (it slipped behind Intel in 2009), the company is still offering conservative estimates for its plans ($4.7B for memory), but don’t be surprised if its total semiconductor capital outlays top $6B.

Intel: With an 85% stranglehold on the MPU market, Intel knows how much capacity is really needed, and is in no rush to add significantly more or overspend. Both Intel and AMD will be focused on keeping MCU supplies tight to help firm up ASPs.

TSMC: The rush of upstart GlobalFoundries might be behind the Taiwanese foundry giant’s extensive capex boost in 2010: a 79% increase to $4.8B, its highest level since 2000.

Toshiba: Despite continued strong demand for flash memory, Toshiba is sensitive to the overspend/overcapacity history of the memory market (a trend that caused the company’s exit from DRAM). "Look for the company to be aggressive but not overly so," IC Insights predicts.

Top 10 semiconductor industry capital spenders, including share of joint-venture spending.  *Includes Chartered in 2010. (Source: IC Insights, company reports)


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