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Asia-Pacific to lead wafer fab spending

Posted: 13 Jan 2004 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductor equipment and materials int.? semi? wafer?

The upturn in the economy and the growth in chip sales are expected to stimulate wafer fab construction activity this year. The Semiconductor Equipment and Materials International (SEMI) estimates that last year's wafer shipments increased by 10 percent compared to the previous year. The association forecasts that shipments will grow by 15 percent by year-end.

The Asia-Pacific region is expected to benefit greatly from this trend, according to the Strategic Marketing Associates (SMA). The market research firm notes that for the first time, Asia-Pacific companies outspent U.S. companies as well as other regions in the world. According to George Burns, president of SMA, the Asia-Pacific region will dominate in terms of spending as well as the number of fabs to be built. He also predicts that 45 percent of 300mm equipment spending will occur in this region.

To date, the top three foundries -- Taiwan Semiconductor Mfg Co. Ltd (TSMC), United Microelectronics Corp. (UMC) and Chartered Semiconductor Mfg Pte Ltd -- are all based in Asia and already account for 75 percent of the sub-180nm foundry capacity in the worldwide market. From 2000 to 2005, these top three foundries are expected to bring around 12 fabs online. Other foundries such as mainland China's Advanced Semiconductor Mfg Co. and Semiconductor Mfg Int. Corp. are adding capacity and switching to 300mm in order to maintain competitiveness.

This year will also see the revival of Japanese manufacturing. Several Japanese fabs such as Elpida Memory Inc., Toshiba Corp., Trecenti Technologies Inc. and Sony Corp. have begun adding equipment to increase 300mm production or started construction of new 300mm fabs. Aside from this, DRAM manufacturers are also expected to lead this year's growth.

Fab construction spending fell last year -- registering a dramatic drop of 70 percent to $500 million during the third quarter. This figure is expected to more than double to $1.2 billion this year as a result of the increase in equipment move-in and construction spending beginning last quarter. New fab activity is expected to bring about an upswing in overall capital spending of 16 percent to $31 billion -- representing the first increase in capital spending since 2000.

SMA forecasts that about 36 new fab projects, including expansions, upgrades and new construction, will begin next quarter. Another 24 fabs are expected to begin production next quarter as well.

Last year saw eight new fabs coming online. Seven out of these fab projects were 300mm and their combined value when fully ramped was expected to reach $12.7 billion last year -- representing an increase of 53 percent over the previous year.

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