88% rise in semiconductor fab spending forecasted

As per SEMI's World Fab Forecast report 2010, spending on worldwide semiconductor fab projects, including construction, facilities, and equipping, could grow by 88% in 2010 compared to 2009 levels.

The growth is attributed to increase in capital spending plans by semiconductor foundries and memory companies. The demand for DDR3 DRAM chips and flash memory chips has prompted memory chipmakers to upgrade their fabs. Also few vendors have planned for new installed capacities. If anything can be read from the past supply-demands cycles of semiconductor chip market, another 5 years is safe bet for semiconductor industry, this will make any delayed fab projects to move forward now.

"Total spending on fab projects could approach $30.9 billion this year, well above the estimated $16.4 billion spent in 2009," said Christian Gregor Dieseldorff, senior analyst of fab information of the SEMI Industry Research and Statistics group. "The 2010 spending recovery, however, remains substantially below the $46 billion spent in the 2007 peak year."

In 2009, 27 volume fabs closed, including eleven 200 mm fabs and one state-of-the-art 300 mm fab. (Several planned fab closures were pushed out to 2010.) As a result of fab closures and low spending levels in 2009, installed fab capacity declined to 15.4 million wafers per month (200 mm equivalent). Based on current capital spending plans, installed capacity is forecasted to grow 5% to 6% this year to about 16.1 million wafers per month.