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Chip capex forecast to top US$100 bln this year

Industry 08:58 November 30, 2018

SEOUL, Nov. 30 (Yonhap) -- Capital spending by global chipmakers is expected to exceed US$100 billion this year for the first time, an industry tracker said Friday, with South Korea's Samsung Electronics Co. leading the pack.

The semiconductor industry's capital expenditures are estimated to reach a new high of US$107.1 billion this year, up 15 percent from a year earlier, according to a report from IC Insights.

Samsung Electronics, the world's leading maker of memory chips, is far by the biggest spender, with its capex estimated at $22.6 billion, down 7 percent and accounting for 21.1 percent of the global total.

Intel came next with $15.5 billion, followed by SK hynix Inc. with $12.8 billion, Taiwan Semiconductor Manufacturing Co. with $10.3 billion and U.S. chipmaker Micron Technology with $9.96 billion.

Chip capex forecast to top US$100 bln this year - 1

Intel's capital expenditures represent a 32 percent on-year jump, with SK hynix reporting a whopping 58 percent increase.

The chip industry's large capital spending has sparked concerns over side effects, such as a global supply glut.

The report said massive facility investments by Samsung and competitors will have an impact on the market over the long haul with a phase of excess capacity starting to take place in the 3-D NAND flash memory segment.

IC Insights predicted chipmakers will scale back their capital expenditures to $94.6 billion next year amid a recent slowdown in the growth of the memory chip market.

Samsung is predicted to trim facility investments by 20 percent to $18 billion in 2019, with Intel and SK hynix likely to cut capital spending by 13 percent and 22 percent, respectively, it said.

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