Global chipmakers are expected to budget 14 percent more for capital spending next year to total US$62.49 billion after two years of cutbacks, to benefit from growing demand from mobile devices, market researcher Gartner Inc forecast yesterday.
This year, overall capital spending is expected to drop 6.8 percent to US$54.77 billion from last year. From last year to 2017, global semiconductor capital spending is expected to grow at a compounded annual growth rate of 4.9 percent to US$74.64 billion in 2017, Gartner projected.
Despite the consistent growth, capital intensity will stabilize, Gartner semiconductor analyst Dean Freeman said. Taking foundry as an example, capital spending will account for about 13 or 14 percent of its total revenue, he said.
Worldwide semiconductor revenue is expected to grow at a compounded annual growth rate of 5 percent to US$382.5 billion from last year to 2017, driven by rising demand for mobile devices, primarily low to mid-end smartphones, Freeman predicted.
The foundry sector will outgrow the overall semiconductor industry with a compounded annual growth rate of 7.8 percent to US$50 billion in 2017, Freeman forecast.
That will be followed by a brief inventory-driven slowdown next quarter and the first quarter of next year, Freeman said.
Freeman said supply and demand in semiconductor chips were a little “imbalanced” now and inventory correction could extend into the first quarter.
Consumers were not spending as much as before, as reflected on back-to-school and Christmas sales, which only rose by 1 percent and 2.4 percent year-on-year, he said during a media briefing.
“Our expectation is that by the second quarter, [it] will be back on track because everybody is doing the right thing by getting inventory to where it needs to be,” Freeman said.
Over the next few years, microelectromechanical systems (MEMS) will be one of the major drivers for the global semiconductor industry as MEMS sensors and microcontroller units are expected to be used in most mobile devices, Freeman said.
By 2017, mobile applications will account for 52 percent of the MEMS market, from between 20 percent and 30 percent this year, he said.
Foundries and chipmakers with less advanced plants will benefit from the growth, Freeman said. MEMS are made using less advanced technologies, such as 25-nanometer technology, he said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, saw its ranking in the global MEMS market rise to No. 3 last year, by growing its revenue from the market by 80 percent to US$42 billion, according to an annual report by market researcher Yole Developpement.
Tapping into the fast-growing MEMS market, Richtek Technology Corp (立錡科技), which designs analogue chips, created a new division recently and expects significant revenue contribution from it within two years, company spokesman Chang Kuo-cheng (張國城) said.