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Foundries tangled in capex arms race

Posted: 07 May 2010 ?? ?Print Version ?Bookmark and Share

Keywords:foundry capex? wafer fab? capital spending race?

Capex race
Silicon foundry giant TSMC has raised its capital spending on various occasions. At present, TSMC's capital spending is targeted at $4.8 billion for 2010. It could go higher, according to an analyst.

"Given that TSMC had initially suggested a 60:40 spend split for their then higher than expected $4.8 billion capex, some bears have suggested that the growth is concentrated in the 1H and that the second half is likely to be lackluster one," Muse said. "However, our latest checks suggest that TSMC is likely to increase its capex budget by up to $1 billion, with at least a $500 million increase likely certain, in our opinion."

Others are also on a spending spree. "Moving to their competitor, GlobalFoundries, one can see that they are also starting to spend, and with their $2.5 billion capex for 2010 still only marginally depleted, 2H should be an ideal time frame to expect more orders from them, for their Dresden, Singapore (Chartered) and finally at the end of the year, for their New York fab," Muse said.

The dark horse is Samsung. "Our checks suggest that their capex might touch $1 trillion won ($894 million), spread throughout the year. And with customers like Apple (iPad processor), Qualcomm, Xilinx etc. in addition to making chips for Samsung's flat panel-related drivers as well as chips for their mobile phones and other appliances, we think that their spending level should only head higher from here," he said.

Taiwan foundry United Microelectronics Corp. plans to spend between $1.5 billion and $2 billion on capital expenditures in 2010, the company said.

China chip foundries Semiconductor Manufacturing International Corp. (SMIC) and Hua Li are also spending money. Hua Li is a joint fab venture between Grace and HHNEC. As reported, Grace Semiconductor Manufacturing Corp and Shanghai Hua Hong NEC Electronics Co. Ltd (HHNEC) have begun construction of a 300mm wafer fab at Zhangjiang Hi-Tech Park, Shanghai.

"In addition SMIC has been spending in 1Q and will continue to spend not just based on its official capex but also from funding or financing they have been able to obtain from provincial/state governments. Finally, Hua Li (HHNEC + Grace) orders are likely to start in the next few months, filling up the roster of orders for a likely 40kwspm capacity build and while initially we too were skeptical, more and more indications are that it is real," he added.

- Mark LaPedus
EE Times

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