Rising inflation and a weakening global economy have forced many, if not most, chip makers to back off their aggressive expansion plans when chip demand outstripped supply. Nonetheless, even with reduced capital expenditures (CapEx) in the semiconductor industry, his forecast for 2022 is $181.7 billion, a record high. IC Insight (opens in new tab).
Semiconductor makers’ capital spending is on the rise in 2020 and beyond as demand rises for everything from smartphones and PCs to giant TVs and self-driving cars. The capital spending budget is expected to grow 35% to $153.1 billion in 2021 and 19% to $181.7 billion in 2022, according to the report.
However, as companies such as Intel and Micron review their CapEx plans for 2023, IC Insights revised its forecast and believes industry spending will fall 19% to $146.6 billion in 2023. That’s just 4.25% lower from his $153.1 billion in 2021 and significantly higher than 2020 capital spending.
Meanwhile, IC Insights believes the memory industry will be hit harder than the logic industry as major manufacturers cut capital expenditures by 25%. Chinese semiconductor companies will also have to cut their budgets by about 30% as US sanctions on the People’s Republic’s semiconductor sector will inevitably affect their ability to procure new production tools.
In any case, the 19% year-over-year decline in capital spending is the steepest decline since the global financial crisis of 2008-2009, IC Insights notes.
In fact, semiconductor industry capital spending fell 40% year-over-year in 2009, but grew only 107% in 2010 as the global economy showed signs of recovery. Given the rapid increase in semiconductor capital spending budgets in recent years, it is unlikely that he will nearly double from $146.6 billion in 2023. Meanwhile, virtually all chip makers (including logic and memory chips) expect demand for their products to recover. From 2024 to 2025. As a result, they believe they will need to expand production capacity to meet that demand in the middle of his decade. As a result, spending on new fabs will increase significantly over 2024-2025.
Fabs already built or equipped, including US fabs by companies such as Intel, Micron, Samsung Foundry, TSMC and Texas Instruments, will come online on time because delaying such projects would be costly. .
Interestingly, IC Insights does not believe funding U.S. semiconductor suppliers as part of the U.S. CHIPS and Science Act will significantly increase spending in 2023. their own money they should have spent on the new fab.
“In other words, CHIPS and Science Act funding is not expected to be ‘additional’ funding for planned semiconductor industry spending, but instead is expected to result in non-availability of CHIPS and Science Act funding. If it does, it could replace the money the chip maker was trying to budget for. IC Insights President Bill McClean wrote: