Semiconductor capex not slowing down in 2011
Global semiconductor capital equipment spending raced ahead 143% in 2010 to $41.08B (including some OEM contributions), according to Gartner. Some key trends: It was a year of both technology and capacity additions, those with memory and foundry exposure did particularly well, double-patterning helped some (ASML) but not others (Nikon), and the top 10 suppliers expanded to account for 63.4% of total revenue.
Japan's massive and tragic earthquake/tsunami has hampered reliable infrastructure/power and created shortages of semiconductor components and materials (e.g. silicon and BT resin). Nonetheless, "semiconductor equipment manufacturers should be able to recover in the second half of the year," Gartner thinks.
Top 10 companies' worldwide revenues (in US $M) from shipments of semiconductor equipment. (Source: Gartner)
In fact, IC Insights thinks 2011 will still enjoy significant capex growth even accounting for the Japanese disaster. The firm has boosted its capex outlook to 17% ($60.4B), then slowing (but still growing) in 2012 to $63.3B. Foundries will be both updating technology and adding manufacturing lines, and memory suppliers simply need to push to the next process geometries.
2011 top spenders' forecasted semiconductor capital spending (in US $M, including joint-venture spending. *Includes Chartered for 2010. (Source: IC Insights, company reports)
It's worth noting that every cent of capex growth in 2011 is coming from the top-10 spenders, vs. a -1% decline in spending from everyone else. (Also note that over the past two years Samsung has shelled out more than $20B, equivalent to five leading-edge 300mm wafer fabs.) But all the massive spending hasn't been excessive, IC Insights argues: 2010 capex/sales was just 16%, the second lowest on record—and mostly for technology-ramping, not capacity additions—and 2011 capex/sales will be just 17%, IC Insights forecasts. (Leading up to and through the 2001 downturn capex/sales was around 26%, and was ~20% from 2003-2009.) The firm projects this low spending ratio will continue through 2012 and beyond, at 14%-17% capex/sales over the next five years.
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