Contract manufacturers are expected to account for more than 1/3 of global semiconductor capital expenditure this year, according to research firm IC Insights. This highlights the growing dependence of new factories and equipment for 7/5/3nm processes on contract business models.
According to the report, global semiconductor capital expenditure will surge 34% in 2021 to a record $152 billion, far exceeding last year's record high of $113.1 billion. This is the strongest growth since 2017 (41%).
In 2021, foundry is expected to account for 35 per cent of all semiconductor capital expenditure, making it the largest share of capital expenditure in major products / categories. As the industry's demand for IC manufactured using advanced process technology nodes continues to rise, the capital expenditure of foundry becomes very important. Since 2014, only the largest portion of product / category spending in 2017 and 2018 is not foundry (DRAM and flash memory account for the highest proportion).
In terms of specific manufacturers, TSMC is expected to account for 57 per cent of all contract factory spending ($53 billion) this year. At the same time, Samsung has invested heavily in contract manufacturing and is trying to persuade more leading fabless suppliers to stay away from TSMC.
In addition, SMIC's capital expenditure is expected to fall 25 per cent to $4.3 billion this year, accounting for only 8 per cent of total spending by all contract manufacturers.
Capital expenditure in all semiconductor categories is expected to show strong double-digit growth in 2021, with the largest 42 per cent growth in contract manufacturing and MPU/MCU, followed by analog chips / others (41 per cent) and logic chips (40 per cent), the report said.
