Surveying The Silicon Landscape

The outlay calls for more than $5 billion for a new chip fabrication plant in Chandler, Ariz. Intel before announced plans to spend up to $8 billion over several years to build a new development fab in Oregon, and upgrade several other existing U.S. sites.

Amtech Systems bolstered its position in China's solar power markets in February, paying $9.5 million for a majority stake in Hong Kong-based Kingstone Research, a leader in ion deposition semiconductor equipment.

Cymer, which gets 20% of its revenue from Japan, saw its shares fall 5.9%. Shares of Lam Innovation, which gets 15% of its sales from Japan, dropped 5%.

Â? Name of the game: Chip gear companies are diversifying their businesses beyond their traditional markets of semiconductors for computers and other devices. Key target areas are adjacent growth markets like LED lighting and solar power systems.

Solid end-user demand for semiconductor-powered products, namely smartphones and tablets, and a competitive race to produce more compact chip designs, is driving the ongoing race among chip manufacturers to upgrade to more advanced innovation and additional capacity.

Meanwhile, chip gear companies are moving to acquire more business along the value chain, SEMI's Tracy says. Instead of passing along wafers or chips to other companies for furthermore processing, vendors before in the supply chain want to do some extra steps.

Â? Upside: Robust sales of smartphones, media tablets, personal computers, servers, network storage and cloud computing could drive continued demand for chip equipment to supply elements.

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