Taipei, Dec. 13, 2007 (CENS)--The chip-making industry will cut 9% of capital expenditure as a whole next year to US$51 billion from this year’s level, a study recently released by market-research organization IC Insights.

The organization attributed the spending reduction mostly to the significant trims at dynamic random access memory (DRAM) chipmakers and silicon foundries in a bid to boost average retail prices and profitability.

The top-five spending cutters are Micron Technology, ProMOS Technologies, Samsung Electronics, Hynix Semiconductor, and Nanya Technology, all of which are coincidently DRAM chipmakers.

World leading foundries including Taiwan Semiconductor Manufacturing Co. (TSMC), United Microelectronics Corp. (UMC), Chartered Semiconductor Manufacturing Ltd. and Semiconductor Manufacturing International Co. (SMIC) have announced to steeply cut capital expenditures next year.

IC Insights owed the considerable cuts at the foundries to the recent underselling competitions triggered by oversupplies.

DRAM chipmakers also have oversupply trouble, which has been blamed for dragging down profits of the industry.

In the IC Insights study, DRAM chipmakers are said to increase spending by 44% in 2004 as a whole on 300-mm wafer fabs, resulting in today’s oversupply.

IC Insights pointed out that in spite of the likelihood of a lukewarm market for chip-making equipment next year, conservative capital-spending plans at chipmakers will help ease downward pressure on average selling prices of chips. Accordingly, the organization forecasts global chip market to rise 10% or so next year.
(by Ken Liu)