Sat, Dec 01, 2018 - Page 11 News List

Semiconductor spending tipped to fall 12 percent

MEMORY MARKET:While Samsung Electronics is likely to scale back spending on 3D NAND flash, it would maintain its status as the No. 1 spender, IC Insights said

By Lisa Wang  /  Staff reporter

Global semiconductor companies are to scale back capital spending by 12 percent next year from this year, as major memorychip makers are to slow down capacity expansion amid slack demand, IC Insights said yesterday.

Combined capital spending by the world’s top three suppliers of memory chips — Samsung Electronics Co, SK Hynix Inc and Micron Technology Inc — is projected to decline by 17 percent to US$37.5 billion, compared with US$45.4 billion this year, the researcher said.

IC Insights said the expected decline in capital spending was due to “the current softness in the memory market.”

The weakness is expected to extend into as least the first half of next year, it said.

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the No. 4 semiconductor spender worldwide, is forecast to trim capital expenditure by 2 percent from US$10.25 billion this year to US$10 billion next year, IC Insights said.

The Hsinchu-based chipmaker in October said that it plans to spend between US$10 billion and US$10.5 billion on new equipment this year, primarily to boost advanced 7-nanometer technology output.

TSMC said that it would maintain high capital spending of US$10 billion to US$12 billion over the next five years to support a compound annual growth rate of between 5 and 10 percent in revenue through 2023.

Samsung, the world’s biggest maker of memory chips and a foundry rival to TSMC, is expected to reduce its capital spending by 20 percent next year to US$18 billion from this year’s US$22.62 billion.

While Samsung is likely to scale back spending mostly through cuts to 3D NAND flash memory chips, the South Korean company would maintain its status as the No. 1 spender among semiconductor firms next year for a third straight year, IC Insights said.

Intel Corp comes next, with capital spending expected to reach US$13.5 billion, IC Insights said.

The figure is 13 percent less than the US chipmaker’s outlays of US$15.5 billion this year, it said.

SK Hynix, the third-largest spender, is expected to cut capital spending by 22 percent from US$12.8 billion to US$10 billion, while Micron is to trim 5 percent from US$9.96 billion to US$9.5 billion, the researcher said.

Overall, worldwide semiconductor companies are to spend a combined US$94.59 billion next year, down from US$107.14 billion this year, IC Insights said.

This year is to be the first time that global chipmakers see their capital spending top US$100 billion, it said.

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