Semiconductor capital spending in the Chinese mainland is expected to grow slightly this year, marking it to be the only region in the world which will see increased investment as spending elsewhere will tumble 17 percent on year, United States-based research firm SEMI said July 3.

In 2008, capital spending on the Chinese mainland is expected to reach US$2.1 billion, a 3-percent growth on year. Global spending is expected to drop to US$50.3 billion this year from US$60.4 billion in 2007, SEMI said.

"The growth in spending by Chinese companies is due to the SMIC affiliated municipally owned fab plants," said George Burns, an analyst with SEMI.

SMIC (Semiconductor Manufacturing International Corp) has cooperated with local governments to build facilities in Wuhan, Chengdu and Shenzhen.

Globally, capital spending is forecast to drop US$10 billion to US$50 billion in 2008, with perhaps more declines to come. Hynix, for example, is rumored to be planning further cuts to its 2008 spending.

Industry giants like South Korea-based Samsung and Hynix have reported a fall in net profit or even a first quarterly loss due to the sluggish memory market.

Led by memory chip manufacturers, particularly in Taiwan, Asia Pacific companies are planning to cut their spending by US$6.6 billion.

The Semiconductor Industry Association has predicted a cut in 2008 revenue growth in the global semiconductor market to 4.3 percent from 7.7 percent.

The association, however, expects the market will rebound from 2009 to grow at least six percent to generate revenue of US$283.2 billion.

(Shanghai Daily July 3, 2008)