Spending on semicon fab equipment to reach US$58b in 2018

KUALA LUMPUR: Chip manufacturers are expected to increase their spending on semiconductor fabrication (fab) equipment to US$58bil in 2018, with Samsung taking the lead.

The US-based Semiconductor Equipment Manufacturers Industry (SEMI) said in its World Fab Forecast report this was a 5% increase from the expected US$55bil for 2017. The last record spending was in 2011 with about US$40bil.

“Out of the 296 front end facilities and lines tracked by SEMI, the report shows 30 facilities and lines with over US$500mil in fab equipment spending.  

“The 2017 fab equipment spending (new and refurbished) is expected to increase by 37%, reaching a new annual spending record of about US$55bil,” it said.

SEMI reported that the largest equipment spending region was South Korea, which was expected to increase to about US$19.5 billion in spending for 2017 from the US$8.5bil in 2016. This was a 130% on-year growth.  

In 2018, the World Fab Forecast report predicts Korea will remain the largest spending region, while China will move up to second place with US$12.5bil (66% growth on-year) in equipment spending. 
SEMI said the report also projected double-digit growth for Americas, Japan, and Europe/Mideast, while other regions growth is projected to remain below 10%.

“The World Fab Forecast report estimates that Samsung is expected to more than double its fab equipment spending in 2017, to US$16bil to US$17bil for front end equipment, with another US$15bil in spending for 2018. 

“Other memory companies are also forecast to make major spending increases, accounting for a total of US$30bil in memory-related spending for the year,” it said.  

Other market segments, such as Foundry (US$17.8bil), MPU (US$3bil), Logic (US$1.8bil), and Discrete with Power and LED (US$1.8bil), will also invest huge amounts on equipment.  These same product segments also dominate spending into 2018.

“In both 2017 and 2018, Samsung will drive the largest level in fab spending the industry has ever seen,” it said.  

SEMI said while a single company can dominate spending trends, SEMI’s World Fab Forecast report also shows that a single region, China, can surge ahead and significantly impact spending. 

Ona global scale, the World Fab Forecast tracks 62 active construction projects in 2017 and 42 projects for 2018, with many of these in China.