May 18, 2012 -- Barclays Capital updates its wafer fab/semiconductor production equipment (WFE/SPE) capital expenditures expectations for TSMC, Samsung, Intel, UMC, GLOBALFOUNDRIES, SMIC, and Huali.
While the debate continues on the sustainability of foundry spending into H2 2012, the timing of a NAND order recovery, and the likely WFE trajectory in 2013, Barclays maintains that growing capital intensity and semiconductor industry consolidation should reduce fab equipment cyclicality and transition orders to a more seasonal pattern.
The key changes to the 2012 outlook over the last 8 weeks include upside to the foundry capex outlook and incremental downside to the NAND capex outlook. NAND orders will potentially pick up exiting 2012.
With the 28nm capacity adds from TSMC/Samsung/UMC/GLOBALFOUNDRIES totaling only ~65K this year vs. the ~500K peak reached at 45nm, strong foundry tool equipment capex is sustainable through 2013. Next year’s wafer fab tool orders will likely be at the upper end of +/-10%.
In the second half of 2012, industry shipments should be only slightly lower than those in the first half; Q3 tool orders will dip slightly from Q2, heading into a ramp up in Q4:
- Orders from Samsung foundry and memory will be H1 loaded.
- Orders/shipments from TSMC will be relatively balanced H1 and H2 thanks to TSMC’s recent capex boost.
- Intel’s 14nm orders will begin to ramp in Q3 for select fab tool vendors, with more meaningful orders in Q4.
- UMC and GLOBALFOUNDRIES should place 28nm orders in Q2 through Q4.
- SMIC and Huali orders should materialize in the second half of the year.