Samsung is expected to have the largest capex budget of any IC supplier again in 2018, according to IC Insights. After spending US$24.2 billion for semiconductor capex in 2017, Samsung will allocate another US$22.6 billion in its capex for semiconductors this year.
Samsung's semiconductor capital spending for 2017 and 2018 will likely be an astounding US$46.8 billion, which nearly matches the combined two-year capex spending of US$48.4 set by Intel and TSMC, IC Insights said.
Samsung's semiconductor capex exceeded US$10 billion annually for the first time in 2010. The annual capex averaged US$12 billion from 2010 to 2016, IC Insights indicated.
After spending US$11.3 billion for semiconductor capex in 2016, Samsung more than doubled its 2017 capex budget, IC Insights continued.
IC Insights believes that Samsung's massive spending outlays in 2017 and 2018 will have repercussions far into the future. One effect that has already begun is a period of overcapacity in the 3D NAND flash market. This overcapacity situation is due not only to Samsung's huge spending for 3D NAND flash, but also from spending by competitors (such as SK Hynix, Micron, Toshiba and Intel) that attempt to keep pace in this market segment.
IC Insights forecast that total semiconductor industry capital spending will climb 15% to US$107.1 billion in 2018, followed by a 12% decline in 2019.
In addition, given that the current softness in the memory market is expected to extend into at least the first half of next year, the combined capital spending by the three largest memory suppliers - Samsung, SK Hynix and Micron - is forecast to drop from US$45.4 billion in 2018 to US$37.5 billion in 2019, a decline of 17%, according to IC Insights. |