SEMI forecasts lowest fab spend in 15 years
Worldwide spending in 2009 on front-end equipment in semiconductor fabs is expected to hit its lowest level since 1994.
All regions are showing double-digit declines in construction spending in 2009, with the possible exception of the Americas, according to SEMI. The Americas have experienced some of the lowest spending levels in the past few years, but are expected to see growth driven by Intel and AMD. Recently, both companies have announced multi-billion dollar plans for upgrades and capacity expansion both in the US and internationally. These investments also represent the largest investment in the US since 2007, when Intel equipped its Fab 32 in Chandler, Arizona and IM Flash established the Lehi and Manassas fabs.
Worldwide, eight facilities are expected to commence operations in 2009, and in 2010, a total of about 18 additional facilities may begin operations.
SEMI, which has revised its forecast for 2009 downwards several times since mid-2008, predicts that companies will spend up to $12bn on front-end equipment this year. It is the lowest level of spending since 1994, when companies spent approximately $11bn, and less than two-thirds of the spend during the depths of the last semiconductor recession in 2001 and 2002. SEMI estimated spending on front-end equipment during 2008 to be close to $25bn.
Since the global economic downturn, the hardest hit area in semiconductor manufacturing has been the memory industry, which has experienced bankruptcies and consolidations. Qimonda, which filed for insolvency in January 2009, and subsequently closed down its manufacturing in the US, cut capacity by 75 per cent in its front-end fab in Dresden for the first quarter of 2009.
SEMI currently expects front-end equipment purchases to snap back to 2008 levels next year.