IC companies cut capital spending
Steep drop in revenue drives capex reductions at IC firms.
By Jim Carbone -- Purchasing, 6/11/2009 4:07:00 PM
Capital spending by semiconductor companies will decline 40% to $26.1 billion in 2009 from $43.3 in 2008, according to market researcher IC Insights.
Other than chip industry giant Intel, semiconductor suppliers are slashing their capital expenditures, which will likely lead to higher prices in 2010 and 2011.
Intel will reduce its capital spending by about 2% in 2009 to $5.1 billion, according to researcher IC Insights. However, Samsung, the largest memory IC manufacturer, is cutting back its capital outlays by 33% to $4.5 billion. Micron, another memory chip maker, is reducing its capital spending by 74% to $600 million from $2.3 billion in 2008, says the researcher.
Other large capital expenditure reductions by chip companies in 2009 include Infineon, 81%; Toshiba, 57%; Hynix, 69%; STMicroelectronics, 49% and SanDisk 69%.
Chip companies are slashing capital expenditure budgets because their sales revenue overall will decline 21% in 2009 after dropping about 2% in 2008. In 2010, capital expenditures are forecast to rise 15% to about $30.6 billion. However, that figure is less than what capital spending was back in 1999.
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