Saturday, March 5, 2011

Wafer Fab Capex will grow 20% in 2011 for IC and Discrete, but not LED

SEMI’s internal analysis of semiconductor manufacturers’ capital expenditure (capex) announcements used to update the fab. database predicts that total semiconductor capex will grow between 15 and 20% in 2011. Attached Table compares investments on fab equipment and construction, and how those rates compare to the record high levels set in 2007.

We can see that there may be a drive for demand of End Of Line manufacturing equipment in 2011 that may happen in Q2.

We can see Discrete is rising from 4% to 7% in 2011 vs 2010.

MPU and Logic rises from 16% to 23% in 2011 Vs 2010.

Memory reduces from 36% from 645 in 2011.
Slow Down for LED Fabs

The largest segment for new fabs is the LED industry, with wafer sizes of 2-inch and 4-inch. Significantly fewer new LED fabs will begin construction in 2011 and 2012. SEMI’s World Fab. report lists 24 new LED fabs beginning construction in 2010, but only five new LED fab. projects are likely in 2011.
This slowdown may be explained by recognition that in the near-term the industry has added too much capacity, coupled by changes to government subsidies in China. For example, historically local governments in China supported the domestic LED industry with hefty subsidies. Companies received up to 8-10M RMB for each MOCVD reactor. Some of these subsidies will expire this year, and others are expected to change.

On the other hand, LED per TV reduces dramatically with Disruptive Technology of LED. From Average 1000 LED in 2009 to 200 LED 2011. That was 5 times reduction rate.

We can see that IC will be experiencing a steady growth this year comparing with Last year with more significantly in Discrete Area. Were as LED will be slow down in the growth comparing with 2010.

Data source Source: SEMI World Fab Database Reports (February 25, 2011)

HK Snob

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