IC Insights Forecasts Top 25 Capital Spenders for 2007
Taiwan companies weigh in with big capex budgets

After increasing 18% in 2006, total semiconductor-industry capital spending is forecast to climb only 1% in 2007 according to data released in a recent update of IC Insights' McClean Report. Samsung ($6.7 billion) and Intel ($5.5 billion) are forecast to remain the companies allocating the most money for capital expenditures. Although the two firms plan to lower their capital spending outlays during 2007 as compared to 2006, they are forecast to represent a combined 22% of total semiconductor capital expenditures in 2007!

Figure 1 lists the top 25 capital spenders ranked by budgeted 2007 capital expenditure outlays. The top 25 companies are forecast to register a 2% increase in total 2007/2006 capital spending and are expected to account for 87% of total worldwide semiconductor capital spending in 2007.

Sixteen semiconductor companies have billion-dollar-plus capital expenditure budgets for 2007. Five of these are based in Taiwan, four in the U.S., three in Japan, and two each are from Europe and South Korea.

The combined spending from the Taiwanese producers is expected to increase 16% in 2007, especially impressive after they logged a 37% increase in 2006! The Taiwanese and "Other” companies (including China- and Singapore-based companies, 12%) are expected to be the most aggressive spenders in 2007 while collectively, North American (1%), South Korean (flat), European (-5%), and Japanese companies (-12%) are forecast to spend at or below the industry average.

The company with the largest percentage increase among the top 25 is Taiwanese DRAM supplier Nanya. The company is forecast to raise its 2007 capital spending more than 2.5X compared to its 2006 spending level. NEC is forecast to register the biggest decline in capital spending in 2007 (-36%) as it reorganizes and attempts to improve its profitability. TI, the U.S.-based DSP and analog supplier, is also forecast to register a large decline in capital spending in 2007 (-29%) as the company continues to evolve further into the "fab-lite” business model.

Figure 1

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