TSMC's 2013 Capex Expected to Surpass Samsung's

Taiwan Semiconductor Manufacturing Co. (TSMC) is estimated to surpass Samsung Electronics Co. next year in capital expenditure on reports that South Korean chipmaker would halve its 2013 outlay from 2012's US$12.5-13.4 billion range.

South Korean daily news Kyunghyang Shinmun reported that Samsung plans to cut 2013 capital spending due to anemic market for memory chips. Taiwan's industry executives estimated that TSMC would outstrip Samsung in 2013 spending once the reports are confirmed to be true.

While TSMC has yet to confirm reports that it would set aside US$10 billion for capital expenditure next year, industry executives estimated the world's No.1 silicon foundry would increase the 2013 sum to US$10 billion from this year's US$8.3 billion.

The speculative estimate would make TSMC the No.2 capital spender in world semiconductor industry, after only Intel Corp.

Industry executives pointed out that in spite of reports on Samsung's spending cut, Samsung will continue enhancing its foundry operation in hope of retaining Apple's contracts at a time when the two companies' relationship becomes deteriorating after several lawsuit engagements.

Samsung recently announced it will spend US$4 billion to boost production capacity at its Austin, Texas, factory, which is the company's primary source for foundry service.

Industry executives fear that Samsung would undersell its foundry service to keep its capacity busy once Apple retreats all of its contracts from it.

Market research organization IC Insights points out that Samsung, Intel, TSMC, Hynix Semiconductor Inc., and GlobalFoundries Inc. are the only six chipmakers worldwide to increase capital spending this year, with the spending each by Samsung and Intel exceeding US$10 billion mark.

source & copyright: CENS