Semiconductors: Capital spending to increase
Semiconductors
Jim Carbone, Executive Editor - Electronics -- Purchasing, 5/14/2003 6:00:00 AM
Buyers can expect semiconductors manufacturers to increase capital spending for the first time in three years.
Capital spending by chip companies fell 28% in 2002 and 37% in 2001, but will increase 15% in 2003, according to market researcher IC Insights. In total the top 25 semiconductor companies will spend about $23 billion in capital expenditures.
Intel will spend the most. It is expected to spend about $2.7 billion in 203. However, in 2002 Intel spent $4.7 billion for capital expenditures.
Samsung Semiconductor will boost its capital spending by a hefty 90%. The company will increase spending from about $1.9 billion to $3.6 billion. Intel and Samsung will account for about 25% of the worldwide semiconductor capital spending I 2003.
Toshiba will boost its capital spending from $55 million to $840 million, a 51% increase.
North America chip companies will spend the most in capital expenditures with about $9.5 billion followed by Japanese companies at $6 billion and Taiwanese at $3.7 billion.
Some of the capital spending will be invested in 300mm wafer fabs replaced 200mm fabs. The large size wafers can offer significant per die cost savings vs 200mm wafers if good yields can be achieved, according to IC Insights. However, the new 300mm fabs costs about $2 billion and many companies have delayed building the fabs. Many chip manufacturers found it easier to cut per die costs by shrinking device feature sizes of 200mm wafers and getting more usable chips per wafer
However, it is getting more costly to reduce wafer sizes so 300mm wafers are getting more attractive to reduce cost.
Of the top 10 chip companies, nine have them already although some involve joint ventures. Toshiha has one planned for 2004.
However, of the top 40 chip companies only 14 have 300mm fabs although five others plan to have fab in the next several years.
From a purchasing perspective, the more 300mm fabs the better as suppliers are able to reduce cost of chips by getting more usable chips per wafer.
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