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SEMI sees stronger fab spending growth in SEA

Posted: 09 Mar 2011 ?? ?Print Version ?Bookmark and Share

Keywords:fab expenditure? fab equipment? fab projects?

Semiconductor Equipment and Materials International (SEMI) has revised its initial forecasts for fab tool spending in 2011. The company is now eyeing a 22 percent year-on-year increase in investments in fab projects, including construction, facilities and equipping, and a 28 percent growth in fab equipment (new and used) expenditure.

According to the SEMI World Fab Forecast report, spending on worldwide fab projects, including construction, facilities, and equipping, could grow 22 percent over 2010 levels with fab equipment spending (new and used) to grow by 28 percent over 2010 levels.

For Singapore, IM Flash is still expected to be the key spender. Fab spending for construction and equipping is South East Asia (SEA) is expected to show strong growth from $2.2 billion in 2010 to $3 billion in 2011, a 36 percent YoY growth. The Overall capacity in SEA will increase 20 percent from 1.16 million (average wafer per month, 8" equiv.) in 2010 to 1.38 million in 2011.

"Total spending on fab projects could approach $47.2 billion this year, above the estimated $38.6 billion spent in 2010," said Christian Gregor Dieseldorff, senior analyst of fab information in the SEMI Industry Research and Statistics group. "2011 spending will finally exceed the peak year's 2007 fab spending of $46.4 billion." Table 1 compares investments on fab equipment and construction, and how those rates compare to the record high levels set in 2007.

Fab investment table

Table 1: Front End Fab Spending over Time Source: SEMI World Fab Database Reports (February 25, 2011).

Some companies will spend record amounts in 2011, reaching historic record levels. For example, TSMC increased capex from a record $5.9 billion in 2010 to another record high of $7.8 billion in 2011. Intel increased capex from $5.2 billion in 2010 to $9.0 billion in 2011. GlobalFoundries doubled its 2010 capex from $2.7 billion to $5.4 billion in 2011.

Most spending is directed toward upgrading existing facilities, as companies try to avoid overcapacity and oversupply. Prior to the economic downturn, capacity growth from 2004 to 2007 ranged from 14 to 23 percent per year. SEMI's World Fab Forecast predicts slower but steady growth in capacity, about 9 percent for 2011 and 7 percent for 2012 (excluding Discrete devices). Annual capacity growth rates in 2013 and 2014 are also expected to hover around 7 percent.

While there is record spending on Fab equipment, few new facilities are on the horizon. In 2010, 34 new volume fabs began construction, most of them for LED fabs. In 2011, only seven facilities have a high probability of being realized. Four more are likely to start in 2012. The largest segment for new fabs is the LED industry, and the report lists only five new LED fab projects are likely to begin construction in 2011.

Comparing new construction projects over the past 10 years to the coming two years, we see a rapid slow down, especially for new 300 mm fabs. In 2010, SEMI's World Fab Forecast identified seven 300 mm volume fabs (excluding R&Ds and pilots) beginning construction. However, in 2011, only Intel's fab is predicted to start in mid-2011. In 2012, three 300 mm fabs will begin constructiontwo of which are potential candidates for 450 mm-ready cleanrooms.

For the first time, SEMI's World Fab Forecast data identifies seven facilities (R&Ds, pilots and volume fabs) in the near future that are candidates for 450 mm readiness. The first facilities are expected to come on line in 2013, though it remains to be seen if enough mature 450 mm tools will be available to fully equip a high-volume fab.

The growing strength and significance of the semiconductor industry in Asia and Singapore in particular is the reason for the rise in prominence of the annual SEMICON Singapore 2011, to be held from May 11C13, that will focus to bringing together the top manufacturers to drive Fab efficiency through IDM and Foundries as well as equipment and materials markets. The invited speakers from key manufacturers include ASE, GlobalFoundries, Infineon, NXP, SSMC and TECH, offering value-added networking and information exchange opportunities to this event. Specialized forums will include topics of Market Trend Briefing, Manufacturing Efficiency, Advanced Packing, MEMS and SOLARCON.

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