There are 11 chip manufacturing companies with a forecast annual capex of over $1 billion for 2017 ranked by IC Insights, and three are planning to increase capex by 25 percent or more compared with 2016, the firm pointed out. These are Intel, Globalfoundries and STMicroelectronics.
It is notable that in general IDMs, such as Samsung, Intel, SK Hynix, Toshiba and STMicroelectronics, are increasing their capex, while pure-play foundries, such TSMC, UMC, SMIC are decreasing their capex. Big spending Globalfoundries is an exception on the foundry side and while memory chip IDM Micron expects to cut back.
Top 11 chip companies ranked by forecast capex for 2017. Source: IC Insights.
If they stick to their plans the top 11 will account for 78 percent of total worldwide semiconductor industry capital spending in 2017 as industry wide capital expenditure increases by 6 percent to $72.3 billion.
SMIC nearly doubled its capital expenditure in 2016 while it was running its fabrication facilities at ≥95 percent utilization for much of the year. SMIC plans to ease back in 2017.
In contrast Samsung and Hynix were prompted to reduce their total 2016 capital spending by 13 and 14 percent respectively due to weak DRAM pricing. As that sector is now going into undersupply the two companies are pushing their capex up.
Sony is a past billion-dollar capex spender – on image sensor manufacturing – who is not in the 2017 ranking while ST is expected to replace Sony in the billion-dollar capex club as it increases its spending by 73 percent to $1.05 billion. This is likely to be a one-off event as ST generally invests 10 percent of annual sales, or less, in capital equipment.
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