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Taiwan fab equipment spending forecast to grow over 24% in 2019

2018/12/18 19:08:32

Image taken from Pixabay

Taipei, Dec. 18 (CNA) Taiwan's spending in fab equipment for the semiconductor sector is expected to grow more than 24 percent from a year earlier in 2019, according to a research report released by global industrial association SEMI Tuesday.

In the report, SEMI said Taiwan's fab equipment spending is expected to hit US$11.44 billion in 2019, up 24.2 percent from 2018.

The growth expected for Taiwan bucks a year-on-year 7.8 percent decline expected for global fab equipment investment for next year, SEMI said.

Despite the decline in overall global fab investment, equipment spending for pure foundry operators is expected to grow 10 percent to US$13 billion worldwide in 2019.

Market analysts said Taiwan's over 20 percent year-on-year increase in fab equipment investment in 2019 will reflect massive investment by contract chipmakers in line with the global pure foundry industry.

Analysts said Taiwanese contract chipmakers are keen to develop high-end processes by spending more on production equipment in a bid to maintain a lead over their foreign counterparts.

According to SEMI, the almost 8 percent decline in global fab spending forecast for 2019 came after a revision of an earlier estimate of a 7 percent increase due to a fall in memory chip prices and uncertainty over business outlook caused by continued trade tension between the United States and China.

In addition, pure foundry operators in China are cutting back production, and some chip firms around the world are scaling back capital expenditure in their 28-nanometer process, which will also contribute to the global investment fall in 2019, SEMI said.

The association said South Korea is expected to witness its fab equipment spending falling sharply by 34.7 percent from a year earlier to US$12.09 billion in 2019.

In China, fab equipment spending is expected to hit US$11.96 billion, down 2.0 percent from a year earlier in 2019, SEMI said.

Investment in the Americas is expected to grow 3.0 percent from a year earlier to US$4.97 billion in 2019, while spending in Japan is expected to fall 1 percent to US$8.65 billion, SEMI added.

(By Chung Jung-feng and Frances Huang)