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Report: Fab plans on hold in 2010

Posted: 03 Dec 2009 ?? ?Print Version ?Bookmark and Share

Keywords:fab? IC capital spending? fab tool?

Capital spending is expected to rise by 65 percent in 2010, but plans for new fabs will remain on hold for next year, according to SEMI.

In other words, don't expect any new fabs that need to be equipped for next year. "The coming year appears to be a year of recovery, but plans for new fabs remain on hold," said Christian Gregor Dieseldorff, an analyst at SEMI, in a report.

"Most companies will not invest in new facilities or significantly in new capacity in 2010," he said. "Companies show more interest in investing in equipment used for technology upgrades."

In 2009, capital spending is expected to hit $15.5 billion, down 49.5 percent over last year, according to SEMI. In 2010, capital spending is expected to hit $25.7 billion, up 65.9 percent, according to the firm.

The largest six spenders in 2010 dubbed "The Fantastic Six"are Samsung, Intel, TSMC, Flash Alliance, GlobalFoundries and Inotera.

One year ago, "a total of 19 facilities (14 new fab constructions plus the continuation of five projects put on hold after the shell was built) were projected to commence or resume in 2010," Dieseldorff said.

"As 2009 comes to an end, there have been no additional plans announcing new fab construction projects for 2010. We expect the five fab projects (only a shell exists) previously delayed due to market conditions to resume activity in 2010. Of the 14 other fab projects, only one has a higher probability to begin construction next year," he said.

In fact, look for more fab closures. "Now at end of 2009, we know that a total of 49 facilities have closed or will close by the end of 2010. This translates into a decline of 4 to 5 percent in total installed capacity for 2009," he said. "Looking to 2010, installed capacity is forecasted to grow by 4 to 5 percent compared to 2009. This trend, however, translates to no capacity growth from 2008 to 2010."

The net result? The strong fab tool vendors will get stronger. The weak will get acquired or disappear.

Worldwide sales of new semiconductor equipment in 2009 will total $16.0 billion, according to SEMI. Following a 31 percent decline in 2008, the equipment sector will post a decline of 46 percent in 2009. The figure represents the largest annual decline in equipment sales since the global industry association began its data collection program in 1991.

However, SEMI expects the market to bounce back in 2010 and grow approximately 53 percent to $24.5 billion and to further increase about 28 percent in 2011 to $31.2 billion.

- Mark LaPedus
EE Times

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