Capital expenditure to increase by 14 percent in 2018 compared to 2017, rising above $100 billion for the first time
SAN FRANCISCO — Semiconductor industry capital spending is now expected to increase by 14 percent in 2018, pushing it above the $100 billion mark for the first time, according to a revised forecast by IC Insights. The market research firm had said in March it expected capital spending to increase by 8 percent this year.
Total semiconductor industry capital spending is now expected to be about $104 billion this year, 53 percent higher than the $68 billion that the industry shelled out in capital spending just two years ago in 2016, IC Insights (Scottsdale, Ariz.) said.
IC Insights attributed the increase largely to South Korean chipmakers Samsung Electronics and SK Hynix, which continue to enjoy the spoils of a seller’s market for both DRAM and NAND flash memory.
SK Hynix is projected to spend about $11.5 billion, up 42 percent from 2017, IC Insights said. The market research firm projects that Samsung will invest about $20 billion in capital spending this year, down from $24.2 billion last year.
Samsung has not stated its plans for capital spending investment in 2018, other than to say it would reduce its spending from 2017. According to IC Insights, however, Samsung continued to spend aggressively in the first quarter, laying out an estimated $6.72 billion, nearly four times as much as it spent two years earlier in the first quarter of 2016. Over the past four quarters, Samsung has spent approximately $26.6 billion on capital outlays for its semiconductor group, according to IC Insights.
— Dylan McGrath is the editor-in-chief of EE Times.