Eleven companies are forecast to have semiconductor capex budgets greater than US$1 billion in 2017, and account for 78% of total worldwide semiconductor industry capital spending for the year, according to IC Insights.

By comparison, there were eight companies in 2013 with capital spending in excess of US$1 billion, IC Insights indicated. Three of the top-11 major capital spenders (Intel, Globalfoundries and ST) are forecast to increase their semiconductor spending outlays by 25% or more in 2017.

The biggest percentage increase in spending by a major spender in 2016 came from China-based pure-play foundry SMIC, which ran its fabrication facilities at 95% or more than 95% utilization rate for much of the year, IC Insights said. SMIC initially set its 2016 capex budget at US$2.1 billion. However, in November, the company raised its spending budget to US$2.6 billion, which resulted in outlays that were 87% greater than in 2015.

In contrast to the surge of spending at SMIC in 2016, the weak DRAM market spurred both Samsung and SK Hynix to reduce their total 2016 capital spending by 13% and 14%, respectively, IC Insights said. Although their total outlays declined, both companies increased their spending for 3D NAND flash in 2016. Micron is forecast to cut its spending by 13% in 2017, even after including Inotera, which was acquired by Micron in December 2016, IC Insights said.

In 2016, Globalfoundries had plenty of capacity available. As a result, the company cut its capex by a steep 62%, IC Insights identified. Globalfoundries is forecast to increase its spending for 2017 by 33%, the second-largest increase expected among the major spenders (though its 2017 spending total is still expected to be about half of what the company spent in 2015). It is assumed that almost all of the spending increase will be targeted at installing advanced processing technology. Globalfoundries has disclosed it is focusing its efforts on developing 7nm technology and will skip the 10nm node.

After spending about US$1.06 billion in 2016, Sony is expected to drop out of the major spender listing in 2017 as it winds down its outlays for capacity additions for its image sensor business and its spending drops below US$1 billion, IC Insights said. STMicroelectronics is expected to replace Sony in the major spender listing by increasing its spending by 73% to US$1.05 billion in 2017. It should be noted that ST has stated that this surge in outlays is expected to be a one year event, after which it will revert back to limiting its capital spending to 10% or less of its sales.