IC insights: Semiconductor industry capital spending expected to surge 24% to $190.4 billion in 2022

According to a report released by research firm IC Insights, following a 36% surge in 2021, capital expenditures in the semiconductor industry are expected to surge by 24% in 2022, reaching a record high of $190.4 billion, more than three years ago. increased 86% in 2019.

Additionally, if capital spending grows ≥10% in 2022, it means the semiconductor industry will see three consecutive years of double-digit spending growth for the first time since 1993-1995.

With numerous supply chains strained or disrupted during the COVID-19 pandemic, the electronics industry is in many cases unprepared for the current rebound in demand, the report said. And strong demand has pushed most manufacturing facilities to well above 90% utilization, and even many semiconductor foundries are running at 100% utilization.

Based on such strong utilization and continued high demand expectations, total semiconductor industry capital spending is expected to reach $344.3 billion in 2021 and 2022.

IC insights surveyed 13 sample companies around the world and predicted that these companies will increase their capital expenditures by ≥40% this year. The 13 companies spent 62% more than in 2020 to $60.6 billion last year, and are expected to grow 52% year-on-year to $91.8 billion this year, the report said.

Notably, the top three memory suppliers (i.e. Samsung, SK Hynix, and Micron) are not on the list, while the top three pure-play fabs (TSMC, UMC, and GF) are on the list. The diversity of the list shows that four of the top five analog IC suppliers (Texas Instruments, Analog Devices, Infineon, and STMicroelectronics) plan to significantly increase capital spending in 2022.

Currently, the total capital expenditure of these 13 companies is expected to be 2.5 times what it was two years ago (2020). But most of these semiconductor makers are responding to the current surge in demand. Over the next few years, capital spending as a percentage of sales at many companies is likely to return to pre-coronavirus levels.

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