The significant capital spending plans already announced by some of the major IC manufacturers could result in CapEx reaching between US$34 and US$36 billion, according Mike Splinter, chairman and chief executive officer of Applied Materials.
“Following recent announcements by our largest customers, we now see WFE (wafer front-end) spending for calendar 2011 in the range of US$34 billion to US$36 billion, an increase of 10% to 15% over 2010 and well above our previous view,” noted Splinter in Applied’s quarterly conference call.
With the recent massive increase in spending, particularly in logic IDM (Intel) and foundry (TSMC, GlobalFoundries, Samsung), which is driven by both capacity expansions and technology node migrations, Applied Materials is one of the key equipment suppliers to benefit from this latest CapEx wave.
“Over the past two quarters, there has been a significant shift in the spending mix. Foundry and Logic are increasing as a percentage of overall WFE, with foundry projected to be close to 40% of the total spending in 2011,” added Splinter
Splinter said that although there is a pause in DRAM spending (down 15%) this year as overcapacity looms, NAND Flash capital spending would approach its previous high.
In all the CapEx in 2011 on WFE would enable Applied to grow overall market share by 2% in 2011.
As a result, Splinter is bullish on beating previous revenue records.
“We see momentum building in our end markets and expect our company's fiscal year revenue to be more than US$11 billion, exceeding our previous record by over a billion dollars,” Splinter said in a statement.