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Electronics Production | May 29, 2008

SEMI: Market to hit bottom in Q4/08,<br> Strong Rebound in 2009

According to the World Fab Forecast released by SEMI, spending on worldwide fabs equipping is expected to show declines of about 17% in 2008.
More companies are forced to postpone fab projects due to global economic uncertainties. In 2009, however, the group expects to see a rebound with double-digit growth of over 12%.

Regions reflecting this trend most dramatically include Southeast Asia and Taiwan, who will likely experience declines of 40% and 33% respectively this year, but are expected to recover in 2009 with significant positive growth of over 50% and 80% respectively.

In the Americas, fab equipment spending is expected to decline over the next two years, while China and the Europe/Mideast are expected to see growth both years. Spending in Japan and South Korea is projected to remain slow, but should improve from negative double digits in 2008, to negative single digits in 2009.

The biggest three spenders in 2008 for equipping fabs are Samsung, Flash Alliance and Intel. Though most companies are investing in non-US fab opportunities, Samsung is making significant investment into its 300mm megafabs in Austin, Texas, and Intel continues to invest in its Arizona and New Mexico fabs. In 2009, Rexchip, TSMC, UMC, Promos and Hynix are expected to join Samsung, Flash Alliance and Intel as key spenders on fab equipping.

In the regional construction of new fabs, only Southeast Asia and South Korea are expected to show positive growth in 2008. Southeast Asia should see greater than 160% growth in spending on fab construction projects, due mainly to IM Flash’s plan for a new megafab in Singapore.

After a year of very strong capacity growth in 2007 of about 17%, global fab capacity is projected to slow slightly, but is expected to post growth in the high single to low double-digits over the next two years. In addition, the overall capacity of volume fabs for 300mm is expected to surpass 200mm capacity by the third quarter of 2008. Looking forward, capacity for 200mm volume fabs will remain at the same level, while capacity for 300mm volume fabs is expected to grow consistently in the double digits with over 2.5 times less fabs.

The SEMI World Fab Forecast provides high level summaries and graphs; in-depth analyses of capital expenditure, capacity, technology and products, down to the detail of each fab; and forecasts for the next 18 months. These tools are invaluable for understanding how 2009 will look, and learning more about capex for construction projects, fab equipping, technology level, and products.

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