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August 6, 2009

"Billion-Dollar Club" Members for CapEx Reduced to Three in 2009

Intel, Samsung, TSMC represent smallest number of billion-dollar spenders in at least 10 years.

The number of companies expected to spend at least $1.0 billion on semiconductor capital equipment is forecast to fall to its lowest number in more than 10 years in 2009, according to IC Insights’ recently released Mid-Year Update to The McClean Report. Only three companies, Intel, Samsung, and TSMC, are expected to have capital outlays exceeding $1.0 billion in 2009, down from eight companies in 2008, and 16 companies in 2007 (Figure 1). As shown in the figure, these three companies alone have been part of the "Billion-Dollar Club" every year since 2000.

Figure 1

As shown, the billion-dollar spenders accounted for a record-high 74% of worldwide semiconductor industry capital expenditures in 2007. This figure fell to 56% in 2008 and is expected to drop to 43% in 2009. While only three companies are expected to spend $1.0 billion or more on capex in 2009, they will represent a very significant amount of the total worldwide semiconductor industry capital spending for the year.

The average amount of capex spent by companies on the billion-dollar club list is forecast to be $3.84 billion in 2009, up 28% from $3.01 billion in 2008. Intel ($4.7 billion) and Samsung ($4.5 billion) will spend significantly more than the average, while TSMC has budgeted $2.3 billion. Intel (-10%) and Samsung (-33%) are forecast to spend less than they did in 2008, while TSMC’s planned capex is up 23% from its 2008 spending level.

Capital spending as a percent of semiconductor sales reached a record low of 16% in 2008. With only three companies dedicating $1.0 billion or more for capital equipment in 2009, this ratio is forecast to move even lower, to only about 12% this year! As described in the Mid-Year Update, IC Insights believes that these record low capital spending as a percent of sales ratios will lead to much stronger IC average selling prices (ASPs) beginning in 2010 and extending through 2012.

Report Details, Including the New "Half-Year" McClean Report Subscription

IC Insights’ 2009 Mid-Year Update is a part of its new "Half-Year" McClean Report service. The 2009 "Half-Year" McClean Report subscription includes the 200+ page Mid-Year Update (released July 31, 2009), the August, September, October, and November Monthly Updates, as well as access to The McClean Report subscriber-only Webcasts in August and November. The new 2009 Half-Year McClean Report subscription is value priced at only $1,890.

Note: Current 2009 McClean Report subscribers will receive the products/services described above as part of their full-year subscription.

For more information, please visit www.icinsights.com/prodsrvs/mcclean/.

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About IC Insights

IC Insights, Inc., based in Scottsdale, Arizona, is dedicated to providing high-quality, cost-effective market research for the semiconductor industry. Founded in 1997, IC Insights offers coverage of global economic trends, semiconductor market forecasts, capital spending and fab capacity trends, product market details, and technology trends, as well as complete IC company profiles and evaluations of end-use applications driving demand for ICs.

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