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Largest CAPEX decline initially forecast. Though lowered from the
since 2008-2009 forecast initial outlook, the revised CAPEX forecast
will still amount to a new record high level
SCOTTSDALE, Arizona — At the start of spending.
of this year, semiconductor suppli-
ers were enjoying a strong infl ux of As shown in the fi gure, semiconductor in-
orders due to robust post-COVID-19 dustry capital spending grew 10% in 2020
economic activity. Booming demand and surged by 35% in 2021.
pushed most wafer fab utilization
rates well above 90%. Double-digit increases
If industry capital spending rises as fore-
Many semiconductor foundries operated at cast by 19% this year, it will mark the fi rst
100% utilization. Capital spending budgets three-year period of double-digit CAPEX
for 2022 were set in place to refl ect the increases in the semiconductor industry
strong ongoing demand. since 1993-1995.
The outlook changed mid-year With the memory market collapsing in the
Halfway into the year, however, that out- second half of this year, and weakness
look abruptly changed. Soaring infl ation expected to continue through the fi rst half
quickly slowed the global economy, forc- of 2023, capital spending for memory is
ing many semiconductor manufacturers to forecast to decline at least 25% next year.
reduce their aggressive expansion plans.
Moreover, the newly enacted U.S. sanc-
As a result, IC Insights has revised its tions on Chinese semiconductor producers,
2022 worldwide semiconductor capital especially those regarding semiconductor
spending forecast to show a 19% increase production equipment acquisitions from
this year to $181.7 billion (fi gure). U.S. companies, are expected to lead to
Chinese company semiconductor industry
The revision represents a decrease from capital outlays being cut by 30% or more
$190.4 billion and 24% growth that was in 2023.
Two factors
These two factors are the driv-
ing force behind the forecasted
-19% drop in total worldwide
semiconductor industry spend-
ing in 2023 and the steepest
decline since the global fi nancial
meltdown in 2008-2009.
IC Insights does not expect a
boost to semiconductor CAPEX
from the $52 billion in grants
fromthe U.S. CHIPS and Science
Act. Instead this will be used to
replace what they would have
spent without the grant.
icinsights.com
