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SEMI: Foundry, memory to steer ASEAN IC growth

Posted: 11 Apr 2013 ?? ?Print Version ?Bookmark and Share

Keywords:foundry? NAND? DRAM? MEMS? capital equipment?

While industry forecasts for semiconductor revenue trend from mid-to-high single digit growth in 2013, overall capital investment this year may remain conservative. For Southeast Asia, capital equipment investment will bottom out in the first half of 2013 and slowly pickup in the second half followed by a strong recovery in 2014, trade association SEMI forecasts. Overall front-end fab equipment spending is expected to double next year from $810 million in 2013 to $1.62 billion in 2014.

Foundries will continue to remain profitable with major players such as Globalfoundries and UMC pushing through with expansion plans this year. Memory represents an even bigger chunk of investment in the region as it is the only sector to see investment growth in 2013, according to the latest SEMI World Fab Forecast data. Power semiconductors and MEMS are also expected to see meaningful recovery in 2014 contributing to the overall growth.

Southeast Asia fab equipment spending by product type

Southeast Asia fab equipment spending by product type. Source: SEMI World Fab Forecast, March 2013.

Capacity growth at front-end fab shows 1.7 per cent increase this year and an expectation of higher growth, 8.2 per cent, in 2014, exceeding overall global capacity growth of 5.2 per cent . The growth will mainly be driven by the memory sector, specifically from NAND flash capacity as Micron gears up for further expansion at its Singapore NAND flash facility next year plus ongoing capacity conversion from DRAM to NAND flash at Fab 7 (Tech).

Singapore is emerging to become the third-largest NAND flash manufacturing country in the world, following South Korea and Japan, by the end of 2014. The conversion and the expansion projects will drive related semiconductor investment in the region in 2013 and 2014.

Southeast Asia fab capacity by product type

Southeast Asia fab capacity by product type. Source: SEMI World Fab Forecast, March 2013.

Southeast Asia also has a large installed capacity from outsourced semiconductor assembly and test service providers as well as integrated device manufacturers. This position contributes to the region being the largest packaging materials consumption market in the world, representing a market size of $6.6 billion in 2013 and $6.8 billion in 2014. The region's back-end equipment investment remains significant with over $1 billion spending each year throughout 2012 to 2014, accounting for about 17 per cent of worldwide share according to the SEMI Worldwide Semiconductor Equipment Market Statistics report.

Aside from manufacturing capacity, Southeast Asia is now extending its value proposition to IC design and R&D areas with more joint development projects between multinational corporations and local institutes.

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