Surfect Technologies (fka SUFH)

[Incite101]

Record fab spending in '06, analyst says
Asia Pac companies to account for nearly half of capital spending

Dylan McGrath
EE Times
(11/03/2006 7:39 PM EST)


SAN FRANCISCO — The value of new fab construction will hit an all-time in 2006, resulting in a record value for new fabs beginning volume production in 2007, according to a new report by market analyst Strategic Marketing Associates (SMA).
SMA's latest report on new fab activity projects that the semiconductor industry will start work on 36 new fabs before the end of the year, the firm said Friday (Nov. 3). The total value of the 36 new fabs when fully equipped is estimated at $59 billion, according to George Burns, SMA president. Twenty-five of the 36 projects are 300-mm fabs, Burns said.

"Growth in new fab activity—fabs starting construction, equipping empty shells or converting 200-mm fabs to 300-mm fabs—is breaking all records," said George Burns, SMA president, in a statement.

SMA's Quarterly Fab Report also lists 36 fabs that will begin volume production in the next four quarters, according to the firm. Twenty of these new fabs will be 300-mm, the firm said.

Of the $59 billion in new fabs starting construction this year, $44 billion will be in Japan, Taiwan or China, according to SMA (Santa Cruz, Calif.). Flash memory and DRAM fabs will account for 64 percent of the value of all new fabs starting construction this year, the firm said.

The value of new foundry fabs starting construction this year also increased significantly, from $3.8 billion in 2005 to $11 billion this year as Taiwan Semiconductor Manufacturing Corp., Semiconductor Manufacturing International Corp. and Hua Hong Electronics began work on new 300-mm fabs, according to SMA. This construction will lead to a growth of 12 percent in new foundry wafer capacity coming online in 2007, the firm said.

Flash memory and DRAM capacity will grow by 40 percent and 53 percent, respectively, in 2007, SMA predicted. By the end of 2007, DRAM manufacturers will have added more than 2 million equivalent 20-0mm wafers in monthly capacity since 2001, according to the firm.

Based on these record levels of projected fab activity, SMA forecasts that capital spending will grow by 15 percent in 2006 to more than $54 billion. Forty-eight percent of all capital spending will be by companies headquartered in Asia Pacific, according to the report.

"Within 5 years, Asia Pacific companies will be spending more than the G8 chip manufacturers," Burns said. "It's inevitable that they will be the top spenders."


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