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IC Insights: Semiconductor industry capex to see biggest drop since 2008 next year

Rising inflation and a weak global economy have forced many chipmakers to reduce aggressive expansion plans made at a time when chip supply was outstripping demand. Nevertheless, even though the semiconductor industry’s capital expenditures (CapEx) decreased, but according to IC Insights previously predicted that capital expenditures in 2022 will increase 19% year-on-year to $ 181.7 billion, a new high.

But now that companies like Intel and Micron are reviewing their capex plans for 2023, IC Insights has revised its forecast and sees spending in the sector falling 19 percent to $146.6 billion in 2023. ic Insights notes that the 19 percent year-over-year decline in capex is the largest drop since the 2008-2009 global financial crisis.

In addition, IC Insights believes that the memory industry will be more affected than the logic industry, as major manufacturers will reduce their capital expenditures by 25%.

However, almost all chipmakers (both logic and memory chips) expect demand for their products to rebound in 2024 ~ 2025. As a result, they believe they will need to expand their capacity to meet demand in this decade. As a result, capital expenditures for new factories will grow significantly in 2024 ~ 2025.

Fabs already under construction or equipped, including those in the U.S. by Intel, Micron, Samsung, TSMC and Texas Instruments, will come online on time because of the high cost of delaying these projects.

Interestingly, IC Insights believes that funding for U.S. semiconductor suppliers as part of the U.S. CHIPS and Science Act will not provide a significant boost to their spending in 2023, as they will use the grant money they are about to receive to replace their own investment in new fabs.

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Threza Gabriel
Threza Gabrielhttps://www.techgoing.com
TechGoing is a global tech media to brings you the latest technology stories, including smartphones, electric vehicles, smart home devices, gaming, wearable gadgets, and all tech trending.
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