By Adrienne Downey, Director of Technology Research, Semico Research
In February 2012, Semico forecast 2012 semiconductor capex to reach $59.8 billion. In December 2012, that forecast was virtually unchanged at $59.9 billion, down 5.6% from 2011. After two years of double-digit growth (98% in 2010 and 26.2% in 2011), the semiconductor industry needed to back off and regroup. Most concerning is that the gap between the big spenders and the small has expanded. The top ten spenders for 2012 made up 81% of the total; this figure is up from the 76% of the total in 2011. Overall, the top ten combined spent $48.2 billion, which is only 0.3% up from 2011. Meanwhile, the rest of the companies went from spending $15.3 billion in 2011 to $11.7 billion in 2012, a decline of 24%. Some of the decline can be attributed to companies like SanDisk, which, along with its partner Toshiba, delayed fab expansion projects until 2013. Other companies like ST and TI made capacity improvements over the past few years, so spending in 2012 was mainly for maintenance.
In December 2012, most companies have still not announced capex plans for the following year. This year is no different. However, a handful of companies have given some indication of what they might spend next year. For example, TSMC is forecasting 2013 capex to be slightly up compared to 2012. Most of the other companies that have given a hint of 2013’s capex have indicated flat to down spending compared to 2012. These companies include GLOBALFOUNDRIES, Avago, Fairchild, Micron, ON Semiconductor, SMIC, Spansion, and STMicroelectronics. GLOBALFOUNDRIES announced its “Vision 2015” initiative to expand 300mm capacity in Singapore, but no budget was announced for the project.
That being said, there are several construction projects that may give some indication of spending in 2013. Samsung is retrofitting its Austin fab to switch from NAND to logic production, with mass production beginning in the second half of next year. This is a $4 billion project spread out over 2012-2013. Intel’s D1X and Fab 42 construction will wrap up in 2013; the company will also begin production at 14nm by the end of this year. Samsung, TSMC, and GLOBALFOUNDRIES are also working on the 14nm and 20/22nm nodes. UMC has Fab 12A Phases 5 and 6 under construction, with production schedule to begin in 2014. SanDisk and Toshiba will probably increase their spending to complete the ramp of Fab 5, which they said would be complete by the end of 2013.
Based on current indications, capital spending would seem to be flat in 2013. However, Semico predicts healthy revenue growth this year, which may encourage more spending, particularly in the second half of the year. This may bring total capex for 2013 into the positive range.