Intel, Samsung, TSMC Remain in "Billion-Dollar Club" for CAPEX, Says IC Insights

Aug 18, 2009 15:40 Nikkei Electronics Asia

The number of companies expected to spend at least US$1 billion on semiconductor capital equipment is forecast to fall to its lowest number in more than 10 years in 2009, according to IC Insights. Only Intel, Samsung, and TSMC, are expected to have capital outlays exceeding US$1 billion in 2009, down from eight companies in 2008, and 16 companies in 2007.

While only three companies are expected to spend US$1 billion or more on capex in 2009, they will represent a very significant amount of the total worldwide semiconductor industry capital spending for the year.

The average amount of capex spent by companies on the billion-dollar club list is forecast to be US$3.84 billion in 2009, up 28% from US$3.01 billion in 2008. Intel (US$4.7 billion) and Samsung (US$4.5 billion) will spend significantly more than the average, while TSMC has budgeted US$2.3 billion. Intel (-10%) and Samsung (-33%) are forecast to spend less than they did in 2008, while TSMC's planned capex is up 23% from its 2008 spending level.

Capital spending as a percent of semiconductor sales reached a record low of 16% in 2008. With only three companies dedicating US$1 billion or more for capital equipment in 2009, this ratio is forecast to move even lower, to only about 12% this year.

Yet, IC Insights believes that these record low capital spending as a percent of sales ratios will lead to much stronger IC average selling prices (ASP) beginning in 2010 and extending through 2012.

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