Equipment spending alone: US$49 billion in 2017 and $54 billion in 2018
By Christian G. Dieseldorff, Industry Research & Statistics Group, SEMI (June 5, 2017)
The latest update to the World Fab Forecast report, published on May 31, 2017 by SEMI, reveals record spending for fab construction and fab equipment. Korea, Taiwan, and China all see large investments, and spending in Europe has also increased significantly. In 2017, over US$49 billion will be spent on equipment alone, a historic record for the semiconductor industry. Spending on new fab construction will reach over $8 billion, the second largest year on record. Records will shatter again in 2018, when equipment spending will pass $54 billion, and new fab construction spending will hit an all-time high of $10 billion. See Figure 1.
Figure 1: Investments into fabs for construction and equipment
These unprecedented high numbers are not only driven by a handful of well-known, established companies, but also by several new Chinese companies entering the scene. The top seven established companies are Samsung, TSMC, Intel, SK Hynix, Micron, Flash Alliance (JV between Toshiba/Western Digital), and GLOBALFOUNDRIES. Samsung, for example, is expected to pour historic levels of funds into its fabs both this year and next, mostly for 3D NAND and DRAM. Not to be outdone, Intel is also expected to be a big spender in 2017, investing heavily into 3D NAND in China and its 10nm ramp. TSMC also shows no sign of slowing down.
Several Chinese-based companies have emerged with large budgets, resulting in an increase in overall fab spending (construction and equipment together) of 54 percent year-over-year in China. Total spending rises from $3.5 billion in 2016 to $5.4 billion in 2017, and then to $8.6 billion in 2018, another 60 percent year-over-year (YoY)).
Some of these China-based companies are well known, such as Hua Li Microelectronics or SMIC (top investors in 2017 and 2018), though newcomers in the arena, including Yangtze Memory Technology, Fujian Jin Hua Semiconductor, Tsinghua Unigroup, Tacoma Semiconductor, and Hefei Chang Xin Memory, add to the spending surge.
Breaking down fab equipment spending by region, large amounts of money are being invested in Korea, Taiwan, and China while Europe makes a big leap. See Figure 2.
Figure 2: Fab equipment spending by Region
Korea leads in both years of our forecast period, with spending of $14.6 billion in 2017 and $15.1 billion in 2018. In 2017, Taiwan is projected to be the second largest spending region on equipment, but China will take over second place in 2018 as it equips the many new fabs being built in 2016 and 2017. Americas is in fourth place, projected to spend $5.2 billion in 2017 and $5.5 billion in 2018. Japan will come in fourth, spending $5.1 billion in 2017 and $5.3 billion in 2018. Although the Europe/Mideast region is in fifth place with relatively modest investments of $3.8 billion in 2017, this represents remarkable growth for the region, 71 percent more than in 2016; and the region will bump spending another 20 percent in 2018 (to $4.6 billion).
This exciting growth cycle could continue well beyond 2018. Record fab construction spending of $10 billion for 2018 means new fabs will need to be equipped at least a year down the road, leading to high expectations for good business beyond the current two-year forecast period.
Since the last publication on February 28, 2017, the SEMI Industry Research & Statistics team has made 279 changes on 244 facilities/lines. In that time frame, 24 new facilities were added and 4 fab projects were closed.
SEMI’s World Fab Forecast provides detailed information about each of these fab projects, such as milestone dates, spending, technology node, products, and capacity information. The World Fab Forecast Report, in Excel format, tracks spending and capacities for over 1,100 facilities including future facilities across industry segments from Analog, Power, Logic, MPU, Memory, and Foundry to MEMS and LEDs facilities. Using a bottoms-up approach methodology, the SEMI Fab Forecast provides high-level summaries and graphs, and in-depth analyses of capital expenditures, capacities, technology and products by fab.
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.
June 6, 2017