Semi capex still on course for record year

Paul van Gerven
Leestijd: 1 minuut

IC Insights has adjusted its 2022 worldwide semiconductor capital-spending forecast, which now shows a 21 percent increase this year to 185.5 billion dollars. The revised outlook represents a decrease from 190.4 billion dollars and 24 percent growth that was forecast at the beginning of this year. Though lowered, the revised capex forecast still represents a new record high level of spending.

Combined two-year semiconductor capital spending in 2021 and 2022 is now expected to reach 338.6 billion dollar, IC Insights reports. IDMs and foundries are spending heavily on new manufacturing capacity for logic and memory devices built with leading-edge process technology. Additionally, strong demand and ongoing shortages of many other essential chips such as power semiconductors, analog ICs, and various MCUs, have caused suppliers to boost manufacturing capacity for those products as well.

Nonetheless, IC Insights warns of uncertainty. Soaring inflation and a rapidly decelerating worldwide economy caused semiconductor manufacturers to re-evaluate their aggressive expansion plans at the mid-point of the year. Several, but not all, suppliers — particularly leading DRAM and flash memory manufacturers — have already announced reductions in their capex budgets for this year. Many more suppliers have noted that capital spending cuts are expected in 2023 as the industry digests three years of robust spending and evaluates capacity needs in the face of slowing economic growth.

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