Samsung capex puts pressure on Intel, TSMC
The market analysis firm said that Samsung’s pulse of high-spending would have repercussions for many years to come.
Intel, SK Hynix and Micron are expected to increase their capex in 2018 significantly while TSMC will keep its spending just above the $10 billion mark, and down by 5 percent from 2017.
Top five chip companies by capex. Source: IC Insights.
All of the top five are expected to rein in their capex in 2019 but this will still leave Samsung – at $18 billion – considerably in advance of Intel – at $13.5 billion – with the other three all trying to keep spending at about $10 billion.
One effect of Samsung’s spending is the creation of a phase of overcapacity in the 3D NAND flash market. Not only has Samsung spent to maintain its number one position but others including SK Hynix, Micron and Toshiba have spent in an attempt to keep pace.
Increased spending by SK Hynix in 2018 is focused primarily on bringing new capacity online at two of its large memory fabs – M15, a 3D NAND flash fab in Cheongju, South Korea, and the expansion of its DRAM fab in Wuxi, China. Both fabs are being pushed to open before the end of 2018 and ahead of schedule.
As a result total semiconductor capex is set to exceed $100 billion for the first time in 2018 before declining 12 percent in 2019. The top five spenders are expected to represent 66 percent of total outlays in 2018.
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