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Semiconductor capex on pace for 34% growth in 2021, says IC Insights

Worldwide semiconductor capex is on track to surge 34% in 2021, its strongest percentage gain since a 41% increase in 2017, according to IC Insights.

The US$152.0 billion in outlays this year would also represent a new record high annual amount of spending, surpassing the previous high mark of US$113.1 billion set just last year, IC Insights indicated.

The foundry segment is forecast to represent 35% of all semiconductor capital spending in 2021, easily the largest portion of capex spending among the major product/segment categories, IC Insights said. Foundry has accounted for the largest share of semiconductor capex each year since 2014 with two exceptions in 2017 and 2018 when capex spending for DRAM and flash memory surged.

TSMC, the world's largest foundry, is forecast to account for 57% of the US$53.0 billion in foundry spending this year, IC Insights noted. Samsung is also making significant investments in its foundry operations, as the company continues its effort to lure more leading-edge fabless logic suppliers away from TSMC.

On the other hand, SMIC was being counted on by the Chinese government to supply a much greater portion of semiconductors to the China market, IC Insights said. But SMIC's inclusion on the US blacklist has severely curtailed its ability to carry out those plans. SMIC's capex spending is forecast to drop 25% this year to US$4.3 billion, accounting for only 8% of total foundry outlays in 2021.

For 2021, all of the product segments are forecast to register strong double-digit increases in capital outlays with the foundry and MPU/MCU segments expected to log the largest year-over-year spending increases at 42% followed by analog/other (41%) and logic (40%), according to IC Insights.