Japan quake won’t slow capex, says analyst
IC Insights (Scottsdale, Arizona) said it expects chip industry capex invest to further rise in 2012 to set a new all-time high of an estimated $63.3 billion.
In January, IC Insights projected that semiconductor capital spending would grow 15 percent in 2011 to reach just over $59 billion.
Capital expenditure growth is being drive driven by new manufacturing lines and upgrades to smaller process geometries from foundries as more IC suppliers look to outsource production, IC Insights said. DRAM and flash memory suppliers are spending primarily to upgrade to smaller process geometries, according to the firm.
The top 10 semiconductor industry spenders are forecast to increase their outlays by 25 percent this year, IC Insights said. In contrast, the remaining semiconductor industry companies are expected to cut their capital expenditures by 1 percent, according to the firm.
South Korea’s Samsung Electronics Co. Ltd., which spent $10.9 billion on semiconductor capital expenditures last year—with about 71 percent going to memory—is expected to spend more than $9 billion on capex in 2011, with about 56 percent going toward memory, IC Insights said. Samsung’s 2010 capital spending accounted for 21 percent of the semiconductor industry’s total capex last year, IC Insights said.
IC Insights said its analysts believe that the large jump in capital expenditures in 2010 and the spending amounts forecast for 2011 should not be considered excessive. Capital spending as a percent of sales was only 16 percent in 2010, the second lowest level on record, with 2011 spending as a percent of sales forecast to be 17 percent, according to the firm. IC Insights believes that this level of capital spending will not lead to an industry-wide overcapacity situation through 2012, the firm said. The ratio of capital spending to semiconductor sales is expected to stay in a narrow range of 14 to 17 percent over the next five years, IC Insights said.
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