‘Semiconductor industry investment in fabs equipment declines in 2019’
According to Semiconductor Equipment and Materials International, the trade organization of manufacturers in the semiconductor industry, the total number of investments in equipment for fabs in 2019 will decrease compared to 2018. This is partly due to the low memory prices.
Semi predicts a global decline of nearly 8 percent. In 2018, a total of 60.5 billion dollars was invested in capital expenditures, or the costs for non-consumable parts of a system or product. According to the organization, this will drop to $55.8 billion in 2019.
In August, Semi predicted that 2019 would be the fourth consecutive year in which more investments would be made than the year before, but the trade organization has now adjusted that further downwards. This concerns a decrease of 13 percent in the second half of 2018 and a decrease of 16 percent for the first half of 2019. A strong increase in investments in equipment for fabs is expected for the second half of 2019.
According to Semi, the predicted declines in investment are mainly due to sharply falling nand and dram memory prices. Companies are also changing their strategies due to the current global trade tensions. This mainly concerns leading memory manufacturers, certain fabs in China and some projects around, for example, the 28nm node.
According to an earlier estimate, China would amount to USD 17 billion in investments in 2019, but that has been adjusted to USD 12 billion. However, that $12 billion estimate would be a 2 percent drop based on actual 2018 numbers.
Semi predicted in August that South Korea would reach $17 billion in 2019, which would be an 8 percent decline. That has now been revised down to 12 billion, representing a 35 percent year-on-year decline. For example, Samsung limited investment in the fourth quarter of 2018 and that is expected to continue into the first half of 2019
Investments are expected to be reduced at more companies. SK Hynix is expected to slow down dram production capacity expansion next year and GlobalFoundries is reconsidering plans for its Chengdu fab in China. An exception to this picture is Micron, which is expected to spend 28 percent more on capital expenditure in 2019. This company will mainly expand and upgrade its existing fabs.
It’s not all doom and gloom when it comes to making investments. In the field of cmos image sensors, according to Semi’s expectations, more will be invested in 2019; an increase of 33 percent. Incidentally, a general downward adjustment in 2019 cannot be called completely abnormal, as there has been a clear increase in investment over the past three years, according to Semi, mainly driven by the memory sector. Samsung in particular spent huge amounts.