Memory takes half capex


This year’s capex will be $102 bilkion, says I C Insights, the first rime it has topped $109 billion.

This year’s capex is 9% on thec$93.3 billion spent in 2017, which was a 38% surge over 2016.

More than half of the capex industry is for memory production—primarily DRAM and flash memory—including upgrades to existing wafer fab lines and brand new manufacturing facilities.

Collectively, memory is forecast to account for 53% of semiconductor capital expenditures this year.

The share of capital spending for memory devices has increase substantially in six years, nearly doubling from 27% ($14.7 billion) in 2013 to a forecast of 53% ($54.0 billion) of total industry capex in 2018, which amounts to a 2013-2018 CAGR of 30%.

Figure 1

Of the major product categories shown, DRAM/SRAM is forecast to show the largest increase in spending, but flash memory is expected to account for the largest share of capex spending this year (Figure 2).

Capital spending for the DRAM/SRAM segment is forecast to show a 41% surge in 2018 after a strong 82% increase in 2017.

Capital spending for flash memory is forecast to rise 13% in 2018 after a 91% increase in 2017.

Figure 2

After two years of big increases in capital expenditures, a major question looming is whether high levels of spending will lead to overcapacity and a softening of prices.

Historical precedent in the memory market shows that too much spending usually leads to overcapacity and subsequent pricing weakness.

With Samsung, SK Hynix, Micron, Intel, Toshiba/Western Digital/SanDisk, and XMC/Yangtze River Storage Technology all planning to significantly ramp up 3D NAND flash capacity over the next couple of years (and new Chinese memory startup companies entering the market), IC Insights believes that the future risk for overshooting 3D NAND flash market demand is high


Source link