LONDON IC Insights Inc. (Scottsdale, Arizona) has raised its forecast for 2005 worldwide semiconductor industry capital spending to a 5 percent annual decline, up from a 10 percent drop, but the market research company has lowered its expectations for 2006 to a 7 percent annual decline. Previously the company had predicted a 1 percent annual decline to occur in 2006.
IC Insights has ranked 25 companies ranked by their 2005 capital expenditure budgets. These 25 companies are expected to represent 85 percent of worldwide semiconductor capital spending in 2005, up from 75 percent three years earlier in 2002, IC Insights said. (See below for rankings table)
The top four companies are each expected to spend at least $2.0 billion each in 2005 and account collectively for 35 percent of worldwide semiconductor capital spending. The market research company predicts Samsung Electronics Co. Ltd. and Intel Corp. will account for 25 percent of worldwide semiconductor capital spending in 2005.
Taken together these top 25 companies have budgeted for a 2 percent annual increase in 2005 spending, IC Insights said. The overall industry decline is due to the numerous other semiconductor companies who are expected to cut 2005 spending by 17 percent, IC Insights added.
This represents a high-level view of consolidation in the semiconductor industry and IC Insights said it believes these "other" companies are likely to become reliant on foundries for their IC production to an increasing extent. The others would continue to increase their spending at a lesser rate, or decrease their spending at a faster rate, than the top 25 companies, IC Insights said.
The chipmaker that has budgeted for the largest 2005 capital spending percentage increase among the top 25 is Winbond Electronics Corp., IC Insights said. The company raised its 2005 capital spending budget to five times its 2004 spending level to support the construction of its wafer fab for 300-mm diameter wafers, according to IC Insights.
In contrast Chinese foundry Semiconductor Manufacturing International Corp. the top 25 capital spender that registered the highest spending rate increase in 2004 at 306 percent, has planned the largest budget cut for 2005 of 46 percent, IC Insights said.
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