Fab Investment Outlook Foundry, Memory and LED Clark Tseng, Sr. Research Manager Industry Research & Statistics, SEMI
Outline Fab Investment & Capacity Trend Memory and Foundry Investment Outlook LED Investment Outlook Summary
Economic Trends: Worldwide GDP YoY in % 2011 2012 2013 2014 2015 World 3.9 3.1 3.1 3.8 Advanced Economies: 1.7 1.2 1.2 2.1 Contribution to World in 2012 USA 1.8 2.2 1.7 2.7 23.6 Euro Area: 1.5-0.6-0.6 0.9 18.4 Germany 3.1 0.9 0.3 1.3 Japan -0.6 1.9 2.0 1.2 7.4 UK 1.0 0.3 0.9 1.5 4.1 Emerging Markets: 6.2 4.9 5.0 5.4 China 9.3 7.8 7.8 7.7 8.1 India 6.3 3.2 5.6 6.3 2.4 Brazil 2.7 0.9 2.5 3.2 Source above IMF update July 9 2013 GDP World others 2011 2012 2013 2014 2015 IC Insight (Sept 13) 3.2 2.7 2.9 3.4 Gartner (Aug 13) 2.2 3.1 Henderson (Aug 13) 3.0 2.4 2.3 3.3 3.8 Morgan Stanley (Aug 13) 3.1 3.1 3.9 Deutsche Bank (July, 13) 2.9 3.0 3.9 World Bank (June, 13) 2.2 3.1 3.3 IMF lowered 2013 GDP from 3.6% in Oct 12 to 3.5 in Jan 13 to 3.1% in July 2013 Morgan Stanley lowered from 3.1% to 3% in January 2013 and to 3.1% in August 2013 Some positive indicators: Higher GDP 2014 Higher revenue 2013 & 2014 Better China economy in 2014 Europe debt crisis: improving Housing improving in US 2013 & 2014 Robust auto sales predicted for 2013 Some risk factors Fiscal debt such as in US Eurozone situation Economy in China Turmoil in Middle East Unemployment Consumer sentiment 3
Economic Trends: 2014 Semiconductor Revenue Forecasts: As of Sept 2013:
Economic Trends: Capex Forecasts Semiconductor Capex Forecasts 2012 2013 2014 SEMI (Aug 13) -11% -1.7% 12.0% UBS (Aug 13) -7.0% 0.0% 10.0% Semico (Aug 13) -11.8% 3.9% 10.0% ICInsight (Sept 13) -12.0% -2.0% 9.0% Gartner (Sept 13) -11.9% -6.8% 14.1% Goldman Sachs (Jan 23, 13) -10.0% -10.0% Barclay (Jan 13) -6.0% -15.0% Updates for 2013 or 2014 from Goldman Sachs and Barclay could not be obtained in time
Fab Construction Spending
Fab Construction Projects Average share of worldwide construction spending excluding 2008 and 2009 2003-2007 2010-2014 Americas 15% 31% China 14% 10% Europe & Mideast 10% 5% Japan 20% 10% Korea 16% 14% SE Asia 4% 2% Taiwan 21% 27%
2014 to See Stronger Investment Momentum
Investment in Fabs (Front End) Construction + Equipping Most (not all) construction spending goes into new facilities.
More Capacity Growth in 2014 Source: SEMI World Fab Forecast, Sept. 2013
Shift of Capacity Share ~6.6 M 200mm equiv./month ~16.7 M 200mm equiv./month
Foundry and Memory Lead Capacity Growth
Changing Landscape- Industry Consolidation Numbers may not add up due to rounding
Fab Equipment Spending versus Capacity After the downturn, industry spending geared more towards upgrading existing facilities than adding capacity
15 Memory and Foundry Investment Outlook
Fab Equipment Spending- Driven by Foundry and Memory
Both NAND and DRAM See Healthy Growth in 2014 Source: SEMI World Fab Forecast, Sept. 2013
Memory Investment by Region Source: SEMI World Fab Forecast, Sept. 2013
NAND Flash Capacity Surpassed DRAM in 2012 Source: SEMI World Fab Forecast, Sept. 2013
Foundry Investment by Region Source: SEMI World Fab Forecast, Sept. 2013
LED Investment Outlook
LED Dedicated Fabs Changing LED Landscape Year (begin operation) 2001 2006 2014 Total count of LED fabs* 36 64 166 Capacity in 4-inch EQs w/m 127,124 376,400 ~2,700,000
LED Fab Capacity by Region, 2013 Worldwide LED Epitaxy capacity to reach 2.36 M in 2013 (4 equivalent per month) Source: SEMI Opto/LED Fab Forecast, Sept. 2013
World LED Capacity Trend Source: SEMI Opto/LED Fab Forecast, Sept. 2013
LED Wafer Fab Equipment Spending Source: SEMI Opto/LED Fab Forecast, Sept. 2013 (prelim.)
Summary Fab investment is expected to see strong growth in 2014; though number of new fab construction project declines. Overall capacity growth is limited as device makers targeted towards technology upgrades than capacity. Foundries and NAND Flash continue to be the two driving forces of investment in 2014. DRAM expects to see some improvement driven by mobile applications. LED investment slows down this year and shall expect new expansion projects from Asia in 2014. 29
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