Semiconductor Equipment - Berenberg Bank

Semiconductor Equipment
Technology Hardware
Figure 18: DRAM capex/revenue versus bit growth trend
DRAM
100%
80%
60%
40%
20%
0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
DRAM Capex/revenue
Bit growth
Source: Gartner data
Historically, DRAM capital intensity was positively correlated to bit growth (see
Figure 18). As discussed above, we expect DRAM bit growth to grow at a
moderate 30% rate compared with its historical level of 70%. The spending pattern
(capex/sales) of the DRAM industry is therefore likely to undergo structural
change from the previous 40-60% level to 19-25%.
We estimate that DRAM capex will remain flat or slightly down in 2013 even if the
ASP improves, as DRAM-makers are likely to spend conservatively for the time
being. We may start to see a small capex uptick in 2014/2015 because: 1) DRAMmakers
may begin to spend more as they see sustainable profitability; and 2) most
DRAM-makers plan to start or expand their 2Ynm (25/24/23nm) output in 2014,
followed by 2Znm production in 2015. We could even see substantially higher
capex growth if DRAM-makers start to upgrade current fab to facilitate EUV tools
in 2014/2015, as the EUV tools are much bigger and heavier than previous
lithography tools.
Foundry and logic – the main spenders keep spending
Foundry and logic capex grew at c22% from 2007-2012, versus total capex which
was down by c1% during the same period. The strong capex growth was linked to
the consumer electronics boom that began in 2009/2010.
We expect the consumer electronic market to maintain solid growth over the
next few years, driven by the intensified competition between vendors and form
factor innovations. Logic players such as Intel and Samsung, are exposed to the
trend because they manufacture the chips they use in own devices, while TSMC,
the Samsung foundry, Globalfoundries and other foundries are exposed because
they receive manufacturing orders from fabless players such as Apple, Qualcomm,
Nvidia, Broadcom and Mediatek (see Figures 19 and 20).
18