As companies like Intel and Micron review their CapEx plans for 2023, IC Insights is revising its forecasts and believes industry investment will fall 19% in 2023 to $146.6 billion. This figure is only 4.25% lower than the capital expenditure of $153.1 billion in 2021, and is significantly higher than the capital expenditure in 2020
Rising inflation and a weakening global economy have forced many, if not most, chipmakers to cut back on aggressive expansion plans set in place when chip demand outstripped supply. This is according to a new report by the market research company IC Insights. This, despite the decrease in semiconductor industry capital expenditures (CapEx), the forecast for 2022 is $181.7 billion, a new all-time high.
Capital spending by chipmakers has increased since 2020 due to strong demand for digital systems from smartphones and PCs to giant TVs and autonomous cars. The report claims that CapEx budgets increased by 35% in 2021 to $153.1 billion and are expected to grow by 19% in 2022 to $181.7 billion.
However, now that companies like Intel and Micron are reviewing their CapEx plans for 2023, IC Insights is revising its forecasts and believes that industry investment will fall 19% in 2023 to $146.6 billion. This figure is only 4.25% lower than the capital expenditure of $153.1 billion in 2021, and is significantly higher than the capital expenditure in 2020.
In any case, a 19% year-over-year drop in capital spending is the sharpest decline since the global financial crisis in 2008-2009, IC Insights notes.
Meanwhile, almost all chip manufacturers (including logic and memory chips) expect demand for their products to recover in 2024 ~ 2025. As a result, they think they need expanded production capacities to meet this demand in the middle of the decade. As a result, spending on new pubs will increase significantly in 2024 ~ 2025.
Factories that are already being built or equipped, including those in the US. by companies such as Intel, Micron, Samsung, TSMC, and Texas Instruments, will start producing on time because delaying such projects is an expensive matter. However, it is estimated that after that there will be a break despite the funding offered by the chip law.