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Samsung triggers semiconductor capital spending increase

Samsung triggers semiconductor capital spending increase

"While capital spending outperformed equipment spending in 2013, the reverse will hold true for 2014."

Worldwide semiconductor capital spending is projected to total $64.5 billion in 2014, an increase of 11.4 percent from 2013 spending of $57.8 billion.

Gartner reports capital equipment spending will increase 17.1 percent in 2014, driven by strong memory average selling prices and increased demand for consumer products.

For 2014, the analyst firm's forecast for semiconductor equipment has been increased slightly from the previous forecast.

Longer term, Gartner expects modest growth through the semiconductor cycle, with just a modest pause in the equipment market expected in 2016.

"While capital spending outperformed equipment spending in 2013, the reverse will hold true for 2014," said David Christensen, senior research analyst, Gartner.

"Total capital spending will grow 11.4 percent in 2014, compared with 7.1 percent in our prior forecast — a result of Samsung increasing its announced spending plans to $14 billion.

"Equipment spending will increase 17.1 percent, as manufacturers pull back on new fab construction and concentrate on ramping up new capacity instead."

In recent years, Christensen says the equipment industry has realised significant consolidation, as major vendors have acquired complementary and competitive companies.

As equipment advancements will lead to higher development costs, the trend of industry consolidation should be expected to continue.

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