Semiconductor industry capital spending will decrease 15 and 5 percent in 2019 and 2020 respectively, IC Insights predicts. Reacting to the current slump in the chip market, semiconductor manufacturers have already reduced their capex levels. Typically, they won’t increase spending again before logging several quarters of good operating results, the market researchers states. Given this conservative approach, next year is unlikely to see capex growth.
Historically, IC Insights observes, years in which capex declines usually come in pairs, followed by at least two years of growth, which tends to be especially strong in the second year after the decline ended. However, since the last slowdown in 2013/2014 the increase in spending has been relatively muted. IC Insights believes this is a sign of a maturing semiconductor industry.