Taipei, Oct. 9, 2009 (CENS)--Chip-making equipment vendors estimate capital expenditure of the silicon foundry industry may soar 30-50% in 2010 in light of massive closures of idle factories launched by integrated device manufacturers (IDMs) since outbreak of the economic downturn and aggressive crossovers of process technology.

Based on the estimates, Taiwan Semiconductor Manufacturing Co. (TSMC) is likely to project the spending at US$3 billion, and United Microelectronics at US$700-800 million.

In the meantime, Global Foundries may become more aggressive in upgrading its process technologies at 300mm wafer fabs in attempt to replace UMC as the world`s No.2 foundry. The No.4 player Semiconductor Manufacturing International Co., Ltd. is expected to boost output capacity along with surging foundry demands from 3G chip vendors.

Industry executives pointed out that chipmakers have begun, since late last year, scaling down circuit geometry through photolithography approach to make 55-nanometer and 65-nanometer processes the substitutes for 0.13-micorn and 90nm, which have dominated the foundry production trend over the past three years. The upgraded processes have been applied to mobile-phone chips, 802.11n chips and Gb-Ethernet chips.

In the meantime, suppliers of chipsets, graphic chips, digital TV chips and ARM-based processors have begun employing 40nm and 45nm processes.

Equipment vendors pointed that although TSMC, currently the No.1 player, will spend US$1.8 billion on capacity expansion in the second half and UMC will use US$400 million for the same purpose, their capacities will remain short at least in the fourth quarter.

The vendors estimated demand for 55nm and 65nm process foundries to rise at annual rate of 40-50% in 2010, and projected the output of 45nm and 40nm chipsets and graphics chips to double or triple.