Fab Equipment Spending Sets New Record

Fab equipment spending (new and refurbished) is expected to increase by 37% for 2017, reaching a new annual spending record of about $55 billion. The World Fab Forecast also forecasts that in 2018, fab equipment spending will increase even more, another 5%, for a record high of about $58 billion. The last record spending was in 2011 with about $40 billion. The spending in 2017 is now expected to top that by about $15 billion. (See Figure 1, below)

Figure 1: Fab equipment spending (new and refurbished) for Front End facilities

Examining 2017’s equipment spending by region, Korea, Americas, Japan, and Europe/Mideast will grow in the double digits, while other regions remain below 10% growth. The largest equipment spending region for both years is Korea, which jumps to about $19.5 billion in spending for 2017 from the $8.5 billion reported in 2016. This represents an astounding 130% growth year-over-year.

In 2018, the World Fab Forecast report predicts that Korea remains the largest spending region, while China moves up to second place with $12.5 billion (66 percent growth YoY) in equipment spending. Figure 2 (below) shows which companies contribute the largest share of worldwide equipment spending.

Figure 2: Share of Fab equipment spending of the top 5 devices makers in 2017: Samsung, TSMC, Intel, SK Hynix, and Micron.

Samsung is currently spending record amounts and is expected to more than double its fab equipment spending in 2017, to $16 billion to $17 billion for Front End equipment. The World Fab Forecast report estimates Samsung to have at least $15 billion in spending for 2018.

While Samsung clearly leads the pack in equipment spending for the year — and shows how much a single company can impact an entire market — other memory companies are also predicted to make big spending leaps (Toshiba and Flash Alliance, and Nanya), accounting for a total of $30 billion in memory-related spending for the year. Other market segments, such as Foundry ($17.8 billion), MPU ($3 billion), Logic ($1.8 billion), and Discrete with Power and LED ($1.8 billion), will also invest huge amounts on equipment. These same product segments dominate spending into 2018 as well.

Fab equipment spending for many fabs is at high-levels in 2017. Out of the 296 Front End facilities and lines being tracked with spending, the World Fab Forecast shows 30 facilities and lines with over $500 million in fab equipment spending for the year. Ten of these fabs are in Korea, six in Taiwan, five in China, four in Europe/Mideast, three in Japan, two in the Americas, and one in SE Asia.

In both 2017 and 2018, Samsung will drive the largest level in fab spending the industry has ever seen. Just as a single company can dominate spending trends, SEMI’s World Fab Forecast report also shows that a single region, China, will surge ahead and significantly impact spending. Worldwide, the World Fab Forecast currently tracks 62 active construction projects in 2017 and 42 projects for 2018, with many of these in China. China will begin to equip facilities in 2018 that they started to build in 2016 and 2017, so the 66 percent spending growth is forecasted next year in China. We anticipate a large spending increase to also play out for China in 2019.

More details are available in SEMI’s just-published World Fab Forecast, August 2017 edition which covers quarterly data (spending, capacity, technology nodes, wafer sizes, and product types) per fab until end of 2018.