Gartner has once again revised its capital equipment spending forecast for the period, 2009 through 2012. Not surprisingly, the market research firm has raised its expected sales for Wafer Fab Equipment (WFE) segment for 2009. In its last revisions released in September, 2009, Gartner projected WFE to reach US$12.15 billion, down from its June, 2009 forecast of US$12.818 billion. Gartner currently expects spending to reach US$12.572 billion.
Worldwide semiconductor equipment spending is forecast to decline 42.6% in 2009, lower than the 48.3% figure noted in September, 2009. Gartner expects semiconductor equipment spending to increase 45.3 percent in 2010, up significantly from its previous forecast of 23% for 2010.
“Foundry spending and select spending by a few memory companies drove the growth in the semiconductor equipment segment in the second half of 2009,” said Dean Freeman, Research Vice President at Gartner. “2010 growth will be driven by technology upgrades for the first half of the year. The quarterly growth may see a slight lull in the third quarter of 2010 before capacity additions, starting in late 2010, ramp up the equipment industry into 2011.”
According to Gartner, WFE spending is expected to decrease 48.1% percent in 2009, slightly lower than its previous forecast of a 49.8% decline.
However, the significant change occurs is 2010 with Gartner projecting WFE spending increasing by 56.6%. Previously, Gartner expected spending to grow only 38.2% in 2010.
Gartner raised the issue of availability of 193nm ArF immersion lithography tools in 2010 as foundries such as TSMC as well as DRAM memory manufacturers would be requiring the technology for the first time, which could limit WFE growth in 2010 if the market heats up more.
“The impact of fewer equipment customers will continue to play out in the semiconductor equipment market and further consolidation is to be expected, with mergers and acquisitions, as well as companies closing down that can no longer afford to run a business in the semiconductor industry,” said Bob Johnson, Research Vice President at Gartner. “While initially this may seem to be a dark time for the equipment segment, as the industry consolidates a much stronger equipment sector will emerge to carry on in the future.”
As seen in the chart below, Gartner expects growth to continue through 2012. However, 2013 is now expected to show a small decline in spending compared to the previous year.
Compared to Gartner’s forecast in November, 2008 the WFE spending cycle has become radically different with the next expected spending peak reached in 2012 compared with 2011, and over US$3 billion less.