Huge 2012 capex budgets at Intel, Samsung and TMC will skew the industry dynamics to make it extremely challenging (impossible, in many cases) for smaller companies to remain competitive, says IC Insights.
Intel has announced a capex budget of $12.5bn, Samsung a budget of $12bn and TSMC a budget of $6bn. The three companies should account for a third of the industry’s total capex in 2012.
Samsung, Intel and TSMC have been leading the capex table for some years. “Since 2009, these three companies have boosted capital spending by astounding percentages,” says IC Insights, “in 2010, TSMC doubled its capital spending compared to 2009. In the same year, Samsung tripled its spending! In 2011, Intel doubled its capex compared to 2010.”
Samsung is significantly boosting spending for logic. Approximately $6.5bn of Samsung’s 2012 capex budget is dedicated to logic ICs. Samsung currently has a lucrative business serving as Apple’s foundry partner for the A4 and A5 application processors used in iPad tablet computers, iPhones, and iPod touch devices. It does not want to lose this business. Samsung is demonstrating that it has the means to provide all the process and manufacturing muscle needed when Apple considers a foundry partner to build its next-generation processors. Besides serving as a foundry partner for Apple, Samsung is aggressively ramping its in-house application processor business as demand increases for its smartphones, tablet PCs, and other mobile/media related devices.
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