News is aplenty of heavy capital investments being done. TI, in April, said that it would double the capacity of its 300mm analog fabs (as I said in my earlier blog - after off-loading its wireless products, it has to expand capacity for analog significantly in order to maintain growth momentum). Then the pure-play foundry world leader, TSMC, approved a capex expansion of $1.65 billion for 2010, followed by the Korean giant, Samsung Electronics announcing that it is investing a whopping $22.6b in capex and R&D. And now joining the other major chip companies seeking to ramp manufacturing production to exploit the recovery in global demand, we have the Abu Dhabi government backed GlobalFoundries planning to spend $3b on expansion. The previous plan was for it to spend $2.5b on capex in 2010. Abu Dhabi has pledged to spend about $10 billion to build up GlobalFoundries as a world-class competitor in the foundry business
All this sounds good for the industry which had seen some trough points in the last year and a half. However, the timescales in semiconductor production for planned expenditures to translate into additional capacity is long enough for the industry to move into price decline because of over capacity.