TAIPEI, Taiwan - Intel has outsourced the production of about 15-20% of its non-CPU chips, with most of the wafer starts for these products assigned to TSMC and UMC...
Coming as no surprise, each of the top-five IC product categories in terms of sales all have ties to computing or communication applications...
2019 quarterly capital spending trends for Samsung and TSMC use their guidance for 4Q19. Both companies started off the year with relatively low outlays, and then boosted spending in 2Q19 to more moderate levels. Moreover, both companies announced in their 3Q19 conference calls that they plan to ramp up their spending in 4Q19 to record-high levels.
For 4Q19, TSMC plans to increase its capital expenditures by 64% to $5,147 million, compared to 3Q19. At this level, it would represent an all-time high for the company’s spending in a quarter, exceeding its previous record of $3,799 million in 1Q14 by 36%. TSMC is the only pure-play foundry to offer leading-edge technology and is seeing very strong demand for its 7nm process, which is expected to represent 33% of the company’s sales in 4Q19. Most of its current investment will target adding capacity for its 7nm and 5nm technologies.
Samsung also announced plans to set a new quarterly record high for its semiconductor spending in 4Q19, with “the majority of the 4Q19 capital expenditure earmarked for building memory infrastructure to address mid- to long-term demand.” The company plans to increase its 4Q19 outlays by 81% as compared to 3Q19 to $7,900 million. This level would exceed Samsung’s previous quarterly spending high of $6,877 million in 4Q17 by 15%.
For all of 2019, Samsung’s semiconductor capital expenditures are expected to be $19.9 billion, down 8% from its outlays in 2018. However, the company’s combined 2017, 2018, and 2019 capital expenditures for its semiconductor group are expected to be $65.8 billion, 53% more than Intel, the next highest spender over this same timeperiod.
Moreover, Samsung’s $65.8 billion in 2017-2019 semiconductor capital expenditures would be more than double the $30.8 billion spent by all of the indigenous China semiconductor suppliers combined over this same timeperiod. It appears that the company is very serious about staying well ahead of the new China memory startups and competing with TSMC at the leading-edge of logic technology.
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