South Korea is expected to make the largest investment in fab equipment next year of any country, but the total will still be about 35 percent less than this year, joining the global downward trend, according to a report.
The Semiconductor Equipment and Materials International (SEMI) projected South Korea to spend US$12 billion on fab equipment in 2019, a drop of 34.7 percent from this year.
"Samsung's largest projects to be hit are P1 (slowdown) and the ramp of P2 Phase (delayed)," the report, dated on Dec. 17, 2018, said, referring to the South Korean tech firm's manufacturing lines in Pyeongtaek, south of Seoul. There are also likely adjustments to the S3 schedule, it said.
For SK hynix, SEMI projected slowed DRAM expansion in 2019.
SEMI made big downcast revisions to its global fab equipment investment projections for next year, reversing its earlier forecast of a 7.5 percent increase to a record-high $67.5 billion to a 7.8 percent decline to $55.78 billion.
The growth estimate for this year was also revised down, from 14 percent in August to 9.6 percent, in the latest report.
SEMI cited plunging memory prices and major strategy shifts by companies to respond to trade tensions as the causes of rapid drops in capital expenditures, especially among cutting-edge memory manufacturers. The sectors that expected flying growth in 2019 are now leading the decline, it said in the report.
Fab equipment investment estimate for memory chips next year was changed from a 3 percent increase to a 19 percent decline.
Investment in the DRAM sector was forecast to shed 23 percent, and NAND flash 13 percent.
The report said China, who had raised its fab spending by 84.3 percent this year, is expected to record minus 2 percent next year.
Taiwan will buck the trend by increasing its investment by 24.2 percent to $11.43 billion, the report said. Micron Technologies will also go against the tide by investing 28 percent more next year for a total of $10.5 billion.
"Samsung and SK hynix went on aggressive facility investments last and this year. Even if they scale down the investment significantly next year, the total will still be more than previous years," an industry official said. "The concern is that with Chinese companies making big investments, there could be excessive supply." (Yonhap)