 According to a new report from Gartner Dataquest, the semiconductor capital equipment market, the wafer fab equipment (WFE) sector will see revenue rise by 6.4 percent in 2007 compared to 2006. However, the robust spending by memory manufacturers in particular this year will result in revenue declining by 1.3 percent in 2008.
The new projection from the market research firm is slightly higher than its June forecast for 2007, which it had raised from an earlier forecast showing little or slightly negative growth for the year. In 2008, Gartner forecasts DRAM CapEx to drop, with logic spending seeing further declines year-over-year. NAND flash CapEx is expected to rise as the new capacity additions are needed. The Gartner report noted that in 2008: ‘Foundry spending will provide some relief, but the combination of NAND flash and foundry spending will not counterbalance the impact of slowing DRAM and logic integrated device manufacturer (IDM) spending. However, Gartner still expects DRAM spending cuts to be limited as the transition to 300 mm is required since 200 mm fabs are not capable of cost-effectively manufacturing at or below 65 nm. Trends in DRAM pricing will play a key role in capex cuts in 2008.’ Gartner believes that in 2008, the microprocessor capital spending from both Intel and AMD will be lower than the revised reductions in spending seen in 2007. In the foundry sector the growth in leading-edge nodes (65nm) will not reach parity with trailing-edge production until the third quarter of 2008, resulting in less capital spending required for leading-edge equipment until the second-half of the year. Gartner expects NAND manufacturers will have increased CapEx spending by 9.4 percent in 2007 and a jump of 21 percent in 2008 as more capacity is required to meet demand. With respect to fab utilization in 2008, Gartner said: ‘Overall utilization rates will climb gradually and will be in the low 90% range by midyear and will close out the year solidly in the 90% range. Utilization rates for leading-edge fabs, those running 90-nm-or-smaller processes, will remain above 92% throughout the forecast period. Leading-edge utilization rates will climb to the 95% range by the end of 2008. Total industry capacity will continue to increase dramatically through 2008, but the rate of new capacity additions will slow in 2008 as manufacturers pull back on their investment plans to allow market demand to catch up with existing capacity and production.’ 
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