The number of companies spending more than $2 billion expansions is down to one next year: Intel. In contrast six chip makers invested more than $2 billion in 2000. In fact, three invested more than $3 billion--Intel, STMicroelectronics, and Taiwan Semiconductor Manufacturer Co. Ltd. (TSMC).

Most of this week, analysts have been debating and predicting the level of Intel's 2002 capital spending budget, which could be one-fifth of the industry's entire capex next year depending upon how it plays out. The estimates range from $6.8 billion to as low as $4 billion. The Santa Clara, Calif., microprocessor giant and largest chip maker in the world surprised and confounded most industry observers this year by sticking to its record $7.5 billion in capital spending--during the worst downturn ever for the chip industry!

Officially, Intel won't comment on its initial plans. A spokesman told our sister publication EBN that all of the estimates are wrong because no number has been set--oh yea, right, Intel has no idea what it might spend next year. If anyone wants to believe that we've got a 450-mm fab to sell them.

Back to Motorola and Hitachi. Both companies have been struggling in semiconductors and both are trying to come up with new business models that include greater use of outside silicon foundries. Motorola's capital spending budget was at $2.5 billion in 2000, but the company took drastic measures along with layoffs and cut spending down to $750 million this year. IC Insights predicts Motorola will end up spending just $500 million in semiconductor capex next year.

During a conference call with financial analysts this month, Motorola's chip president, Fred Shlapak, said the 2002 budget has not yet been set but spending will "only be focused on the most mission critical item." That's budget talk for as close to nothing as it can get.

Hitachi also is tightening its capex budget more notches than most. It's capital spending on semiconductor operations has fallen from $1.76 billion in 2000 to just $500 million in 2001. That level will be maintained, according to IC Insight's new ranking.

Hang on to the bottom line, it's still rough riding but bound to get better. Consider the fact that only nine chip makers were in the "$1 Billion Plus CapEx Club" in 1999 after the 1997-1998 slump. Who knows, perhaps the industry will go on a spending binge again around the middle of the decade. If history is any indicator--probably.

$1 Billion Plus Capex Club Shrinks

Company	2000	2001*	2002**
Intel	$6.67 billion (+96%)	$7.50 billion (+12%)	$4.50 billion (-40%)
TSMC	$5.00 billion (+171%)	$2.00 billion (-60%)	$1.50 billion (-25%)
Samsung	$3.10 billion (+72%)	$1.80 billion (-42%)	$1.30 billion (-28%)
TI	$2.76 billion (+98%)	$1.80 billion (-35%)	$1.20 billion (-33%)
UMC	$2.80 billion (+63%)	$1.70 billion (-39%)	$1.30 billion (-24%)
STMicro	$3.30 billion (+145%)	$1.70 billion (-48%)	$1.00 billion (-41%)
Infineon	$1.65 billion (+86%)	$1.70 billion (+3%)	$850 million (-50%)
Micron	$1.45 billion (+60%)	$1.40 billion (-1%)	$800 million (-43%)
IBM	$1.35 billion (+42%)	$1.35 billion (0%)	$1.35 billion (0%)
Fujitsu	$1.87 billion (+136%)	$1.27 billion (-32%)	$1.05 billion (-17%)
Sony	$1.40 billion (+246%)	$1.25 billion (-11%)	$1.00 billion (-20%)
NEC	$1.99 billion (+51%)	$1.19 billion (-40%)	$975 million (-18%)
AMD	$800 million (+29%)	$1.00 billion (+25%)	$900 million (-10%)
Total Industry	$60.8 billion (+85%)	$41.46 billion (-32%)	$31.13 million (-25%)
Source: IC Insights *Current estimate **Forecasted budgets (Percentage in parenthesis shows change from previous year)