January 9, 2014. Based on SEMI World Fab Forecast data, SEMI suggests that spending trends for the semiconductor industry have changed. Before 2009, capacity expansion corresponded closely to fab equipment spending. Now more money is spent on upgrading existing facilities, while new capacity additions are occurring at a lower pace, to levels previously seen only during an economic or industry-wide slowdown.
While the 2013 installed capacity growth mimics economic crisis behavior, according to the SEMI World Fab Forecast Report, the data support improvement in overall capacity expansion in both 2014 and 2015.
Most fab equipment spending before the 2009 crisis focused on adding new capacity. In the five years between 2003 and 2007, the annual growth rate of new capacity increased from 6% in 2003 to 20% growth in 2007 (almost doubling the fab capacity in five years), according to the SEMI World Fab Forecast Report. This was driven mainly by DRAM and NAND companies in Korea, Taiwan, and China. After 2009, while fab equipment spending recovered, new capacity additions trended below pre-2009 growth rates: growth of new capacity dropped from 7% in 2010 to about 4% in 2014, with the expected capacity addition of only 17% in the five years from 2009 to 2014.
Since the 2009 crisis, expenditures on upgrading existing equipment have grown sharply. Expansion projects, such as new fabs, still account for the majority of fab equipment spending, but in lower proportions than in the past. Costs for adding new equipment to a new facility are typically higher than upgrading some of the existing equipment.
According to SEMI, the two industry segments predicted to add the most capacity in 2013 and 2014, based on demand, are foundries and NAND. Dedicated foundries grew at a steady 10% in 2013, and will add another 8 to 10% in 2014. For the second largest segment, NAND, which lost about 4% of capacity in 2012, capacity rose 10% in 2013 and will add another 5 to 8% in 2014. Other segments, such as DRAM, Analog, and Logic, are not expected to add new capacity in 2013 and 2014. MPU may add some new capacity by 2014.