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The US$10 billion bucket
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Front-end semiconductor equipment sales are expected to plummet in 2009 to around US$10 billion. Taking Intel Corp. and Samsung Electronics out of the mix leaves barely a couple of US$ billion for the rest of the equipment suppliers to fight for.
Companies such as Lam Research and its SEZ division do not sell to Intel, so for many suppliers in that same position, 2009 is going to be even tougher.
That said, Intel and Samsung will be in a prime position to beat suppliers over the head for better prices and demand all sorts of concessions to keep the business.
While many may feel secure in the knowledge that they have been selected for Intel’s 32nm migration, Intel rarely single sources so will probably get suppliers to beat each other over the head instead.
With Toshiba pushing out two 300mm fabs, anyone looking for 300mm equipment sales will be heading to the likes of The Foundry Company (old AMD) in Dresden this year. They are now the only company tool installing and ramping capacity at a 'new' 300mm fab in 2009.
However, sources say that we should not expect any business bonanza in Dresden at Fab 40, due to the fact that much of the equipment used to ramp the fab will be used equipment rather than shiny new tools.
Going to Taiwan this year may also prove pointless as the DRAM manufacturers have all but stopped any spending and don’t have any dollars to spend anyway. Tapping TSMC is your only bet, but then everyone will be doing that this year. TSMC hasn’t actually guided CapEx for 2009, only hinted at a 20% drop so far, so don’t hold on to any positive developments there either, especially with a slowdown in advanced node migrations.
US$10 billion seems such a small amount. It will be shared out this year - maybe it could all fill a bucket and be handed out in the parking lot to the waiting suppliers in approximately 1 minute? With travelling expenses cut to the bone as part of the cost-cutting measures everyone is having to make, this could be a perfect way to save lots of dollars in 2009.