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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.

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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.

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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. 


The $16B flip-chip industry, with diverse applications, is growing thanks to new technologies such as copper pillars and technology demands at the sub-3Xnm node, finds Yole Développement.

Global sales for semiconductors used in media tablets and e-readers will surge >120% in 2011 over last year's $3.3B, on the way to a five-year CAGR of 31%, predicts IDC.

GlobalFoundries and imec are partnering on sub-22nm GaN-on-Si technology.

KLA-Tencor and TEL have developed a pair of "dimensional metrology" systems for production-speed characterization of 3D IC features.

Verigy has opted to go with Advantest's $15/share acquisition offer, leaving previous suitor LTX Credence at the altar.

Researchers from IBM and Singapore have developed polymers for detecting and destroying antibiotic-resistant bacteria, applying principles used in semiconductor manufacturing.


Texas Instruments is acquiring National Semiconductor for ~$6.5B, combining two longtime analog market leaders into the overall No.3 global chipmaker behind Intel and Samsung.

Key takeaways from Applied Material's March 23 analyst day: Demand is still strong for wafer-fab equipment; AMAT wants to extend its c-Si solar manufacturing tech and expand into energy storage/batteries; and 200mm demand is surging thanks to tablet computers and electric vehicles.

After two years of contraction, worldwide semiconductor photomask sales grew 10% in 2010, says SEMI, which projects another 7% growth in 2011 and 2% in 2012.

Tracking an AFM tip's resonant frequency can measure in real time the extent to which AFM tips wear down, say NIST scientists.

Tessera says it wants to pursue business outside of semiconductor packaging, and is exploring a possible spinoff of its imaging & optics business.

NexPlanar has secured $10M to expand CMP pad capacity in the US and global locations.

Samsung plans to hire 300 engineers and technicians for its Austin, TX plant.

Owens Design is helping QCept Technologies ramp production of its ChemitriQ 5000 non-visual defect inspection system.

Renesas has sold its semiconductor wafer fab in Roseville, CA, to Germany's Telefunken Semiconductors.

Tabula, a fabless 3D PLD startup, has raised $108 million in Series D funding.

Mentor Graphics has rejected a takeover bid by Carl Icahn and partners.


Japanese semiconductor manufacturers are accelerating efforts to shift production out of areas likely to suffer electricity shortages this summer, notes the Nikkei daily. Renesas is expected to send work to GlobalFoundries, while Toshiba is shifting work to three plants in western Japan.

The GaAs semicondutor sector—raw materials, seminsulating bulk substrates, and manufacturing facilities—appears to have been "largely unaffected" by the Japanese disaster, though broader supply-chain disruption will have an impact, notes Strategy Analytics.

Freescale will not reopen its "seriously damaged" wafer fab in Sendai, which it had planned to shut down anyway by the end of this year.

SMIC has set its 2011 capex at $1B, focused on 300mm production.

MagnaChip Semiconductor is offering Cu wire bonding technology that it says results in 20%-30% packaging cost savings.

Infineon plans a $160M expansion at its Malaysian facilities to increase production capacity for power chips.

TowerJazz wants to purchase Micron's semiconductor wafer fab in Japan's Nishiwaki City, which would nearly double its manufacturing capacity.


CEA-Leti and IPDiA have agreed to develop 3D integration for passives on Si, targeting miniaturization applications in LEDs, healthcare, and aerospace.

EVG has received an automated production bonding tool order from SOI supplier Shenyang Silicon Technology.

Linde will install on-site fluorine generator for TEL's Nirasaki R&D site.

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