Capital expenditure for semiconductor fab equipment spending will increase to US$39.8 billion in 2014, the highest on record, according to SEMI.

　　Fab equipment spending is expected to decline by 1% to US$31.8 billion in 2013, but increase by 25% in 2014, said SEMI.

　　Overall fab spending in the first half of 2013 was slow, especially for fab equipment spending, SEMI indicated. Fab equipment spending is stronger in the second half of 2013, with a 30-40% increase over the first half.

　　However, SEMI revealed a different outlook for fab construction projects, forecasting a 25% spending increase in 2013 to over US$7 billion and then a drop of 16% in 2014 to about US$5.9 billion. Fabs under construction in 2013 will begin equipping in 2014 which affects fab equipment spending.

　　Fab equipment spending for dedicated foundries remains strong in 2013 and 2014, SEMI noted. In the years prior to the economic downturn, fab equipment spending for DRAM was the highest spending industry segment. Since 2011, however, the dedicated foundry sector replaced DRAM as the leading industry sector, SEMI said.

　　DRAM equipment spending dropped by 35% in 2011 and 25% in 2012. However, spending for 2013 and 2014 is set to increase 17% and at least 30%, respectively, SEMI pointed out. An increase of about 2-3% for installed capacity for DRAM in 2014 is small but remarkable, given that the industry has not added any new capacity for years, and actually cut back capacity between 2011 and 2013, SEMI said.

　　The sector with largest growth rate for fab equipment spending in 2014 is expected to be flash with a 40-45% on-year increase, SEMI noted. Over the last few years, capacity additions for the flash sector also stagnated though technology investments. Overall fab equipment spending for flash alone is expected to hit a record of almost US$8 billion in 2014, SEMI said.

　　After flash and DRAM, MPU is expected to show the next largest growth in 2014, with fab equipment spending growing by over 40% on year, according to SEMI. Intel is now preparing for 14nm, kicking off an MPU surge for 2014, said SEMI.