Fab Equipment Spending: Strong Second Half Pulls 2013 Up; over 23% Growth for 2014

Foundry spending increases in 2013 and 2014, Memory and MPU to increase in 2014

SAN JOSE, Calif. — June 4, 2013 — Fab equipment spending will grow two percent year-over-year  (US$ 32.5 billion) for 2013 and about 23 to 27 percent in 2014 ($41 billion) according to the May edition of the SEMI World Fab Forecast. Fab construction spending, which can be a strong indicator for future equipment spending, is expected to grow 6.5 percent ($6.6 billion) in 2013, followed by a decline of 18 percent ($5.4 billion) in 2014. The new World Fab Forecast report covers fab information on over 1,140 facilities, including such details as capacities, technology nodes, product types, and spending for construction and equipment for any cleanroom wafer facility by quarter.

Fab equipment spending for the second half of 2013 is expected to be much stronger with a 32 percent growth rate or $18.5 billion compared to the first half of 2013. The equipment spending increase in the second half is attributed to growing semiconductor demand and improving average selling price for chips. 2014 is expected to have about 23 to 27 percent growth year-over-year (YoY) to reach about $41 billion, which would be an all-time record.

Looking at product types, the largest amounts of spending on fab equipment in 2013 will come from the foundry sector, which increases by about 21 percent. This is driven mainly by capex increases by TSMC. The memory sector is expected to have an increase of only one percent — after a 35 percent decline in the previous year. The MPU sector is expected to grow by about five percent. A double-digit increase in the Analog sector in 2013 will still translate into low absolute dollar amounts, compared to the other sectors.  (See Figure)

Fab Equipment Spending by Product Type over Time (Foundries include System LSI)

Construction spending is a good indicator for more equipment spending.  Fab construction spending in 2013 is expected to be almost 15 percent growth YoY ($6.6 billion) with 38 known construction projects. Top spenders for fab construction in 2013 are TSMC and Samsung, who plan to spend between $1.5 and $2 billion each, followed by Intel, Globalfoundries and UMC. The SEMI World Fab Forecast report reveals more detail.

2014 shows a decline of about 18 percent ($5.4 billion) in construction spending with only 21 construction projects expected to be on-going. These construction projects include large fabs; some are 450mm-ready.  

Since the last fab database publication at the end February 2013 SEMI’s worldwide dedicated analysis team has made 389 updates to 324 facilities (including Opto/LED fabs) in the database. The latest edition of the World Fab Forecast lists 1,144 facilities (including 310 Opto/LED facilities), with 61 facilities with various probabilities starting production this year and in the near future. Seventeen new facilities were added and 8 facilities were closed.

The SEMI World Fab Forecast uses a bottom-up approach methodology, providing high-level summaries and graphs; and in-depth analyses of capital expenditures, capacities, technology and products by fab. Additionally, the database provides forecasts for the next 18 months by quarter. These tools are invaluable for understanding how the semiconductor manufacturing will look in 2013 and 2014, and learning more about capex for construction projects, fab equipping, technology levels, and products.

The SEMI Worldwide Semiconductor Equipment Market Subscription (WWSEMS) data tracks only new equipment for fabs and test and assembly and packaging houses.  The SEMI World Fab Forecast and its related Fab Database reports track any equipment needed to ramp fabs, upgrade technology nodes, and expand or change wafer size, including new equipment, used equipment, or in-house equipment. Also check out the Opto/LED Fab Forecast. Learn more about the SEMI fab databases at: www.semi.org/MarketInfo/FabDatabase and www.youtube.com/user/SEMImktstats 

About SEMI

SEMI is the global industry association serving the nano- and microelectronics manufacturing supply chains.  Our 1,900 member companies are the engine of the future, enabling smarter, faster and more economical products that improve our lives. Since 1970, SEMI has been committed to helping members grow more profitably, create new markets and meet common industry challenges. SEMI maintains offices in Bangalore, Beijing, Berlin, Brussels, Grenoble, Hsinchu, Moscow, San Jose, Seoul, Shanghai, Singapore, Tokyo, and Washington, D.C.  For more information, visit www.semi.org.