U.S. Regains Chip Gear Spending Crown in 2009

Who says the U.S. is losing its edge in manufacturing? The nation will spend more on new chip manufacturing equipment this year than any other country, regaining a title it last held in 1994, according to the trade group Semiconductor Equipment and Materials International (SEMI).

New factory spending plans by Intel, the world's largest chip maker, and GlobalFoundries, the contract manufacturing venture formed by Advanced Micro Devices (AMD) and Advanced Technology Investment Company (ATIC) of Abu Dhabi, put U.S. chip equipment spending on track to reach US$3.56 billion this year, said Clark Tseng, senior manager of industry research and statistics at SEMI, during a conference at the Semicon Taiwan trade show.

Japan will slip into second place from first on spending of $2.96 billion this year, he said.

The global recession hit the chip industry hard this year. Spending on new chip production line equipment plunged 52 percent to $14.14 billion in 2009, after falling 31 percent last year to $29.52 billion, according to SEMI.

A total of 31 chip factories will close worldwide this year.

Growth is expected to return next year. SEMI forecasts global spending on chip equipment will rise 64 percent in 2010 to $24.4 billion. Japan may regain its chip equipment spending title if companies follow through on expected $4.32 billion in purchases next year, but the U.S. will be close with $4.30 billion in projected spending.

The next two largest chip producing regions will also increase spending next year. South Korean chip makers are expected to spend $3.59 billion on new factory equipment in 2010, while Taiwanese companies are forecast to spend $3.56 billion. Spending by Chinese companies is expected to double next year to $1.59 billion from $780 million this year.

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