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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (89)	10/26/2001 9:21:01 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

Just nine chip makers stay in '$1 Billion Plus CapEx Club' next year The number is down sharply from 17 in 2000, according to new report By J. Robert Lineback Semiconductor Business News (10/26/01 08:52 a.m. EST) Recent Articles Silicon Strategies Insider Trading (October 2001) Analog, 'micro' ICs will give weak recovery some legs, says new WSTS forecast IR posts $9.6 million net income while sales drop 9% from prior quarter Intel and AMD battle over antitrust documents ITC blocks U.S. sale of select chips from Broadcom, report says Optical giant JDS reports $1.2 billion loss in 3Q, expects 10-15% decline in 4Q Varian Semi posts $7 million net loss on lower revenues in quarter Archives Oh how the mighty hath fallen. Just look at how many large semiconductor manufacturers are now able and willing to spend $1 billion or more on new manufacturing plants and chip capacity. According to the latest information from IC Insights Inc., the "$1 Billion Plus Capital Expenditure Club" will shrunk to nine IC manufacturers from 13 in 2001 and 17 in 2000. With wafer fabs--especially the new 300-mm variety--costing as much as $2-to-$3 billion each, it is certain that fewer chip plants will be launched this decade, compared to the heydays of the 1999-2000 boom cycle. The table below is compiled from IC Insight's new listing of the top 35 capital-spending chip companies. The Scottsdale, Ariz., market research firm released its 2002 forecast for capital spending by these companies in its monthly newsletter this week. Overall, IC Insights says worldwide semiconductor capital investments will fall 25% to $31.1 billion in 2002 from $41.5 billion in 2001, which will end up being down 32% from the previous year (see Oct. 23 story). In looking at the table of companies, several things jump out: The number of big spenders is shrinking; The distance between Intel Corp. and the rest continues to be huge; and, Motorola Inc. and Hitachi Ltd. have fallen off the map, capex speaking. The number of companies spending more than $2 billion expansions is down to one next year: Intel. In contrast six chip makers invested more than $2 billion in 2000. In fact, three invested more than $3 billion--Intel, STMicroelectronics, and Taiwan Semiconductor Manufacturer Co. Ltd. (TSMC). Most of this week, analysts have been debating and predicting the level of Intel's 2002 capital spending budget, which could be one-fifth of the industry's entire capex next year depending upon how it plays out. The estimates range from $6.8 billion to as low as $4 billion. The Santa Clara, Calif., microprocessor giant and largest chip maker in the world surprised and confounded most industry observers this year by sticking to its record $7.5 billion in capital spending--during the worst downturn ever for the chip industry! Officially, Intel won't comment on its initial plans. A spokesman told our sister publication EBN that all of the estimates are wrong because no number has been set--oh yea, right, Intel has no idea what it might spend next year. If anyone wants to believe that we've got a 450-mm fab to sell them. Back to Motorola and Hitachi. Both companies have been struggling in semiconductors and both are trying to come up with new business models that include greater use of outside silicon foundries. Motorola's capital spending budget was at $2.5 billion in 2000, but the company took drastic measures along with layoffs and cut spending down to $750 million this year. IC Insights predicts Motorola will end up spending just $500 million in semiconductor capex next year. During a conference call with financial analysts this month, Motorola's chip president, Fred Shlapak, said the 2002 budget has not yet been set but spending will "only be focused on the most mission critical item." That's budget talk for as close to nothing as it can get. Hitachi also is tightening its capex budget more notches than most. It's capital spending on semiconductor operations has fallen from $1.76 billion in 2000 to just $500 million in 2001. That level will be maintained, according to IC Insight's new ranking. Hang on to the bottom line, it's still rough riding but bound to get better. Consider the fact that only nine chip makers were in the "$1 Billion Plus CapEx Club" in 1999 after the 1997-1998 slump. Who knows, perhaps the industry will go on a spending binge again around the middle of the decade. If history is any indicator--probably. $1 Billion Plus Capex Club Shrinks Company 2000 2001 2002* Intel $6.67 billion (+96%) $7.50 billion (+12%) $4.50 billion (-40%) TSMC $5.00 billion (+171%) $2.00 billion (-60%) $1.50 billion (-25%) Samsung $3.10 billion (+72%) $1.80 billion (-42%) $1.30 billion (-28%) TI $2.76 billion (+98%) $1.80 billion (-35%) $1.20 billion (-33%) UMC $2.80 billion (+63%) $1.70 billion (-39%) $1.30 billion (-24%) STMicro $3.30 billion (+145%) $1.70 billion (-48%) $1.00 billion (-41%) Infineon $1.65 billion (+86%) $1.70 billion (+3%) $850 million (-50%) Micron $1.45 billion (+60%) $1.40 billion (-1%) $800 million (-43%) IBM $1.35 billion (+42%) $1.35 billion (0%) $1.35 billion (0%) Fujitsu $1.87 billion (+136%) $1.27 billion (-32%) $1.05 billion (-17%) Sony $1.40 billion (+246%) $1.25 billion (-11%) $1.00 billion (-20%) NEC $1.99 billion (+51%) $1.19 billion (-40%) $975 million (-18%) AMD $800 million (+29%) $1.00 billion (+25%) $900 million (-10%) Total Industry $60.8 billion (+85%) $41.46 billion (-32%) $31.13 million (-25%) Source: IC Insights *Forecasted budget (Percentage in parenthesis shows change from previous year)