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Chip industry hails Samsung, Intel as biggest spenders

Posted: 28 Mar 2014 ?? ?Print Version ?Bookmark and Share

Keywords:chip manufacturing? capex? Intel? Samsung?

The chip manufacturing industry expects an 8 per cent increase at $62.23 billion in capital expenditure (capex) this year, and the biggest spenders will be foundries and memory makers, according to IC Insights.

Despite strong 2014 spending increases led by SanDisk and Micron Technology, the top-five ranking is unchanged, led by Samsung and Intel with spends over $11 billion each.

Leading foundry TSMC is ranked third at slightly less than $10 billion, and collectively these three companies will be responsible for 52 per cent of the total semiconductor industry capex in 2014. The top five companies are responsible for 66 per cent of the forecast total spend of $62.23 billion.

Nine of the top 10 companies are forecast to spend more than $1 billion in 2014, which represents a threshold of sustainability in leading-edge chip manufacturing. That said, tenth-ranked SMIC, with an annual increase of 35 per cent to follow on from a 30 per cent increase in spending in 2013, is striving to join the billion-dollar capex club.

SanDisk cut back its capital spending by 28 per cent in 2012 and by 12 per cent in 2013, according to IC Insights. Now it is set to implement a capital spending percentage increase of 86 per cent, needed to expand production of advanced 3D NAND flash memory with its manufacturing partner Toshiba.

Memory maker Micron Technology is also set to increase spending by more than $1 billion, a 58 per cent jump, as is pure-play foundry GlobalFoundries.

However, for consistent spending, Samsung and Intel remain preeminent. Over the period 2012 to 2014, Samsung is forecast to spend $35.3 billion, with about 60 per cent of this amount targeting memory production, while Intel is forecast to be second to Samsung in total outlays over this same time with $32.6 billion dedicated to capital expenditures. Such spending is sufficient for each company to construct and equip several leading-edge 300mm wafer fabs.

The capex of the "others" category is set to grow by three per cent in 2014, and IC Insights expects it to increase at a much slower rate than the overall market, as most of these other companies are now implementing a fab-lite or fabless business model for IC production.

- Peter Clarke
??EE Times Europe

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