Fri, Dec 10, 2010 - Page 11 News List

Global foundry capacity to rise 8% in 2011: SEMI

MEANS OF PRODUCTION:Spending on chip production equipment is likely to rise 23% from this year to about US$40 billion next year, the industry association said

Staff writer, with CNA,

Production capacity in the global foundry business is expected to grow by 8 percent next year from this year after an estimated 8 percent increase this year, Semiconductor Equipment and Materials International (SEMI) said yesterday.

Production capacity in 2012 is expected to rise another 9 percent year-on-year, the San Jose, California-based trade group said.

SEMI is a global industrial association for the microelectronic, display and photovoltaic industries.

The group said the estimates are based on the input of announced capacity plans and other analyses about foundry investments.

The world’s two largest wafer foundry service providers, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Co (UMC, 聯電), announced increased capital expenditure plans earlier this year, with TSMC raising its apex to US$5.9 billion, from US$4.8 billion estimated in the second quarter, and UMC increasing its spending to US$1.8 billion, from between US$1.2 billion and US$1.5 billion.

Last Friday, TSMC said that it planned to expand its 12-inch wafer capacity by more than 30 percent next year to meet customer demand. TSMC will exceed this year’s capital spending of US$5.9 billion to support the capacity expansion, which would represent a record-high investment on new equipment, TSMC chairman and chief executive Morris Chang (張忠謀) said in a speech at the annual supply chain management forum in Hsinchu.

Despite the expansion by major foundry companies, the increases over the three years are modest compared with the double-digit growth seen each year from 2003 to 2007, SEMI said.

LEADING GROWTH

In the past, the memorychip segment led growth in the foundry business, with growth rates twice as high as the growth in the industry as a whole, but memorychip production capacity is expected to increase at only the same rate as the rest of the foundry industry through 2012, SEMI said.

SEMI said spending on new wafer plant construction projects for next year is expected to fall 11 percent from a year earlier and that the trend might accelerate in 2012.

Despite the falls in spending on construction projects, spending on chip production equipment is expected to rise 23 percent from this year to about US$40 billion next year, SEMI said.

On Nov. 30, the trade group said the growth in chip-equipment sales would be led by better-than-expected demand for wafer-processing gear in North America and China. The group forecast in July that sales would reach US$35.5 billion next year.

Additional reporting by Lisa Wang

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