With semiconductor capital spending taking another major decline in 2009, only three equipment companies had sales greater than US$1 billion, compared with six in 2008 and ten in 2007, according to Gartner. Despite a 38% decline in revenue in 2009, Applied Materials increased its worldwide market share to 15.1%, compared to 13.2% share in 2008. Wafer fab revenue declined for the second straight year, falling 47.4% year-over-year to US$12.7 billion.
The biggest loser was lithography leader, ASML which saw revenue decline 54.1% with revenue of US$1.6 billion compared to US$3.5 billion in 2008. As a result the company dropped one ranking position to third, according to Gartner data.
However, despite a revenue decline of 52.1% in 2009, TEL overtook ASML for second position behind Applied Materials. TEL had a 9.9% market share with revenue of US$1.65 billion in 2009, down from US$3.4 billion in 2008.
Lam Research, KLA-Tencor and Nikon saw revenue declines in the 40% range, while ASM International and Novellus Systems revenue decline in 30% range.
Dainippon Screen (DNS) had the honour of the least decline in revenue amongst the top 10 equipment suppliers. DNS saw revenue decline only 23.7% to US$635.2 million in 2009, down from US$832 million in 2008.
However, with increases in capital spending in 2010, equipment suppliers focused on advanced technology should expect increased revenue as IC manufacturers allocate most investments to shift to the next technology nodes. Capacity expansions however are expected to be muted in 2010 with a round of fab expansions not expected until 2011 and beyond.
"In the past two years, the semiconductor industry responded to increasingly bad economic news by rapidly stopping all but essential spending in an attempt to preserve cash in uncertain economic times," commented Dean Freeman, Research Vice President for Gartner's semiconductor manufacturing research group.
"In the memory sector, continuing losses resulting from plunging prices drove memory capital spending down 54 percent from an already depressed 2008 level. Logic and mixed-signal spending declined 26 percent as manufacturers concentrated on technology upgrades to the next line width to position themselves for the recovery," Freeman said. "By the end of the year, the major companies resumed spending, with a focus on implanting the latest technology throughout their organizations. We expect this trend to continue in 2010, with technology upgrades accounting for the majority of spending — at least through the first half of the year."