Total spending on semiconductor plants -- called fabs -- and chip-making equipment next year will be US$24.4 billion, up from $14.9 billion this year, Semiconductor Materials and Equipment International (SEMI) said in a . However, 2010 spending will be 20 percent lower than 2008, when chip makers spent $30.9 billion, it said.
"In fact, total fab spending (construction plus equipping) in 2010 will remain at its lowest levels since 2003, when about $22 billion was spent," the report said.
More than half of all new spending on plants and equipment, or about $14 billion, will come from six chip makers, which SEMI's dubbed the "Fantastic Six": Taiwan Semiconductor Manufacturing Co. (TSMC), GlobalFoundries, Toshiba, Samsung Electronics, Intel, and Inotera Memories, a joint venture between memory makers Nanya Technology and Micron Technology.
Of this amount, most of the spending will come from Intel and Samsung. Samsung is expected to spend $4 billion to $5 billion next year upgrading production lines in Texas and South Korea, SEMI said. Intel will likely spend $3 billion to $4 billion next year as it upgrades its plants to produce chips using a 32-nanometer manufacturing process, it said.
Heavy investments can give chip makers an edge over rivals. New technologies allow companies to produce more chips on a silicon wafer by shrinking the size of transistors and memory cells. These chips can also be faster and consume less power than chips made using older technologies. As a result, products made using the latest and most advanced technology often command a premium, giving a boost to the bottom line of top chip makers.