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IC Insights has reduced its forecast for global semiconductor capital expenditure slightly for 2022, from US$190 billion to US$185 billion.

This represents a decrease in the annual percentage growth from 24 percent, given by IC Insights at the beginning of the year to 21 percent.

 

Global semiconductor capital spending 2008 to 2022F. Source: IC Insights.

Wafer fab utilization rates at many integrated device manufacturers (IDMs) remained well above 90 percent through the first half of this year and many semiconductor foundries operated at beyond 100 percent utilization rates, as orders remained robust during the economic recovery from the Covid-19 pandemic.

IDMs and foundries are spending heavily on new manufacturing capacity for logic and memory devices built with leading-edge process technology.  However, strong demand and ongoing shortages of many other essential chips such as power semiconductors, analog ICs, and various MCUs, have caused suppliers to boost manufacturing capacity for those products as well.

However, IC Insights sees that the market is on the turn. The exact timing of that turn will have a major influence on annual growth. Soaring inflation and a rapidly decelerating worldwide economy caused semiconductor manufacturers to re-evaluate their expansion plans at the mid-point of the year.  Several suppliers – particularly many leading DRAM and flash memory manufacturers – have already announced reductions in their capex budgets for this year. Many more suppliers have noted that capital spending cuts are expected in 2023.

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www.icinsights.com

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