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Capital spending forecast for 2003 revised upward

Posted: 25 Sep 2003 ?? ?Print Version ?Bookmark and Share

Keywords:nanya? nec? samsung? semiconductor? ic insights?

A recent buying spree among Nanya, NEC and Samsung has prompted an industry watcher to slightly raise its capital spending survey forecast by 2 percent to 11 percent in 2003 over 2002.

But not all major semiconductor companies will spend their budgeted capital spending dollars in 2003, as major foundry and integrated device manufacturers appear to be holding back their expenditures, according to a report from IC Insights. So far, AMD, Infineon, TI, Tower, TSMC, and UMC have all spent less than 50 percent of their previously announced capital expenditure budgets for the year, according to the report.

Based on an updated survey of 47 major semiconductor producers, IC Insights projects that capital spending will hit $29.935 billion in 2003, up 11 from $27 billion in 2002. In its mid-year forecast, the market researcher projected 9 percent in the survey.

IC Insights projected 10 percent growth in terms of capital spending in 2003 over 2002. It also recently released its list of the top 25 companies ranked in terms of capital expenditure in 2003. The list included eight companies that plan to spend $1 billion or more in 2003.

The slight increase in the capital spending survey forecast was due primarily to three chipmakers: Nanya, NEC, and Samsung. Earlier this month, Samsung Electronics Co.'s board approved a plan to invest 505.5 billion won (about $430 million) on its memory production line in Hwasung, south of Seoul.

Taiwan's Nanya Technology Corp. and Japan's NEC Corp. have also separately raised their capital spending by $150 million and $145 million, respectively, in 2003, according to the report.

On the downside, IC Insights also believes that not all budgeted dollars in terms of capital spending will be spent this year. Six companies have spent less than 50 percent of their budgets in 1H of 2003, with Taiwan's United Microelectronics Corp. (UMC) spending less than one-third of its planned outlays, according to the report.

UMC was projected to spend $500 million in terms of capital for 2003, but the Taiwan foundry provider has only spent $156 million for the year, or 31 percent of its budget, according to the report.

Tower Semiconductor Ltd. was projected to spend $300 million in terms of capital for 2003, but the foundry provider has only spent $104 million for the year, or 35 percent of its budget, according to the report.

Texas Instruments Inc. was projected to spend $800 million in terms of capital for 2003, but the chipmaker has only spent $294 million for the year, or 37 percent of its budget, according to the report.

Taiwan Semiconductor Mfg Co. Ltd. was projected to spend $1.25 billion in terms of capital for 2003, but the foundry provider has only spent $467 million for the year, or 37 percent of its budget, the researchers said.

Infineon Technologies AG was projected to spend $1 billion in terms of capital for 2003, IC Insights said, but the chipmaker has only spent $404 million for the year, or 40 percent of its budget.

Advanced Micro Devices Inc. was projected to spend $650 million in terms of capital for 2003, but the chipmaker has only spent $284 million for the year, or 44 percent of its budget.

Other laggards include Micron, Intel, Samsung, STMicroelectronics and Chartered, which have spent 50 percent, 51 percent, 52 percent, 55 percent and 61 percent, of their respective budgets, respectively.

- Mark LaPedus

EE Times





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