Global chip organisation SEMI said that that spending on front end fabs, including construction and equipment, will fall by 51 percent during 2009.
That means construction spending is at its lowest level in 10 years but there is light at the end of the tunnel, SEMI believes.
In 2010, it said, investments in constructing fabs are expected to double and might increase by 90 percent compared to spending this year.
The Americas, however, are bucking the trend. Major investments by chip company Intel help towards a total spend of $1 billion. Intel is moving to a 32 nanometre process.
SEMI said 19 fabs closed in 2008 and 35 fabs will close this year, but it only expects 14 fabs closing in 2010. This year, nine fabs will launch operations.
By sector, memory and logic fabs will be the worst affected during 2009, with a fall in installed capacity of five to seven percent each. That’s largely due to fabs closing.