Semiconductor makers may slow worldwide spending this year to US$44.1 billion after additions to production last year resulted in excess capacity, according to ISuppli Corp, a market researcher.
Growth in spending will slow to 1.9 percent from 27.2 percent last year, the El Segundo, California-based ISuppli said today. China and Japan will be the only two countries in which spending will fall, analyst Len Jelinek said.
"The industry has transitioned quite rapidly from undersupply to oversupply," Jelinek said in a telephone interview.
Worldwide chip sales this year will be the same as last year, when revenue climbed 28 percent to a record US$213 billion, the San Jose, California-based Semiconductor Industry Association said on Jan. 31. Fourth-quarter sales from last year fell 0.8 percent to US$55.1 billion from the previous period.
Chipmakers in China will cut spending by more than one-third this year to US$2.5 billion, while in Japan, investment in expansion will drop 5 percent to US$8.3 billion, Jelinek said. Chipmakers in the two nations can't increase purchases of chipmaking equipment until they build more factory space, he said.
Semiconductor Manufacturing International Corp (
Jelinek said Semiconductor Manufacturing is the standout among companies cutting capital expenditure this year. Intel Corp, the world's biggest chipmaker, and other companies that dominate the industry will increase spending on advanced technology to widen their competitive advantage, he said.
North American companies that sell equipment used to build semiconductors received orders worth less than the equipment they shipped for a fifth month in January, San Jose, California-based Semiconductor Equipment & Materials International said on Feb. 17.
The book-to-bill ratio for North American chip-tool makers was 0.80, the lowest since November 2003, the industry group said.
A ratio of less than 1.00 indicates the market is contracting.
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