The strong spurt in spending at semiconductor foundries so early in the year means that Deutsche Bank has revised its CapEx spending forecast for the industry. Instead of an expected CapEx decline in the range of 15-20% in 2012, compared to 2011, financial analysts at the bank believe spending will only be down between 10-15% versus its prior expectations.
Deutsche Bank expects relatively robust bookings momentum through the first half of the year, driven largely by foundries (Samsung and TSMC), Intel and select NAND orders, according to the bank.
Annual wafer front-end (WFE) spending is forecasted to be approximately US$28.4 billion in 2012, down from an estimated US$32 billion in 2011.
DRAM CapEx is said to be the weakest segment, as low bit growth and overcapacity plagues this customer segment, while Intel’s CapEx reduction in 2012 will result in lower logic segment spending in 2012, versus 2011.
DRAM CapEx is expected to decline 16% y-on-y to just over US$6 billion, following a trend since massive spending in 2010, which helped produce overcapacity last year.
Deutsche Bank said it was revising downward expectations for NAND spending to be flat to down 5%, due to conservative forecasts in bit growth. Bit growth is expected to be closer to 65%, down from its previous expectation of 70% and significantly lower than earlier consensus forecasts of 80-85%. Growth is coming from technology buys not capacity expansions, according to Deutsche Bank
Deutsche Bank expects muted 2013 spending with the chance of a slowdown in spending in the second half of this year.