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Semiconductors and Components

Chip Equipment Spending to Rise 20% in 2015

11 September 2014

Front-end fab equipment spending will increase 20 percent to $42 billion in 2015, after rising 21 percent in 2014, according to trade association SEMI.

In 2015, equipment spending could mark a historical record high, surpassing the previous peak year of 2011 when spending reached $40 billion, according to SEMI’s World Fab Forecast report. Front-end fab spending will total $34.9 billion in 2014.

Seven companies are expected to spend $2 billion or more in 2014, representing almost 80 percent of all fab equipment spending for front-end facilities, the report said. The trend will continue in 2015.

About 90 percent of all equipment spending is for 300mm fabs.

In 2014, the five regions with the highest forecast spending on equipment are: Taiwan, $9.7 billion; Americas, $7.8 billion; Korea $6.8 billion; China $4.6 billion and Japan, $1.9 billion. In 2015, Taiwan will increase spending to $12.0 billion and Korea will boost spending $8 billion. Front-end equipment spending in the Americas will rise slightly to $7.9 billion, while spending in China will increase to $5 billion. Japan’s front-end equipment spending will increase to $4.2 billion.

An increase in spending on Front end equipment does not necessarily mean fab capacity will increase. For instance , in 2010 and 2011, fab equipment spending growth rates increased dramatically, but installed capacity grew by only 7 percent in both years, according to SEMI. In 2012 and 2013, installed capacity grew 2 percent or less.

SEMI said some industry segments, such as foundries, see continuous capacity expansion, while other segments show much lower growth, which pulls down the total global growth rate for installed capacity.

For example in recent years, some major semiconductor companies have switched fabs from DRAM to System LSI or flash while others have discontinued DRAM production completely, contributing to declining DRAM capacity.

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