 Gartner has further adjusted its capital equipment spending forecasts for the next 5 years that could see wafer fab spending reach $41.6 billion in 2011 compared to $32.3 billion expected for 2006. Worldwide capital equipment spending that includes all equipment categories is projected to grow 23.5 percent in 2006, while wafer fab spending is expected to grow by 24.6 percent.
"Semiconductor capital equipment bookings have continued to surge throughout 2006 as semiconductor manufacturers quickly add capacity," stated Klaus Rinnen, managing vice president for Gartner's semiconductor manufacturing and design research group. "However, there are a number of concerns for equipment manufacturers, such as an increasing inventory situation, the strong potential for oversupply in both flash and DRAM if an increase in demand does not materialize, and the delta between equipment spending and semiconductor revenue growth. Combined, these conditions create a scenario that could lead to a slight correction next year." Gartner expects that CapEx will soften in 2007 by 2.7 percent, compared to 3.7 percent growth in its April forecast. The industry will rebound in 2008, as capital equipment spending is forecast to increase 23.3 percent. Gartner believes that total utilization rates will stay in the low 90 percent range in 2006, with leading-edge capacity remaining at about 97 percent, driving the need for additional capacity on 300mm wafers. However, capacity additions will force utilization rates down to 90 percent range in 2007. As the table below shows, the wafer fab capital spending rates will fluctuate considerably through 2011. However, the overall spending trend is upwards. 
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