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Panic reigns in semiconductor capital equipment cuts, says Gartner

19 December 2008 | By Mark Osborne | News > Fab Management

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Gartner Wafer Fab Capital Spending Forecast A newly revised worldwide semiconductor capital equipment spending forecast from Gartner highlights that chip manufacturers have hit the panic buttons on spending for 2009, forcing the market research firm to significantly revise 2008 and beyond projections. Worldwide semiconductor capital equipment spending is expected to decline 30.6% in 2008, compared to 2007 and decline a further 31.7% in 2009. Total equipment spending in 2008 will reach US$31.1 billion and fall to US$21.2 billion in 2009.

“The recession has come at a time when the overall semiconductor and semiconductor equipment industries were already in a vulnerable position,” said Klaus Rinnen, managing vice president for Gartner’s semiconductor manufacturing group. “Device makers across all segments and even in the NAND and DRAM industry have begun to take steps to lower production rates and shutter fabs that are not cost-effective. We are seeing fabs postponed, and what little capex there is, it is selectively focused on new technologies.”

Wafer fab equipment sales are expected to decline 30.9% in 2008, and decline 33.1% in 2009. Previously, Gartner had projected a decline in sales of -26% for 2008 and only a -11.9% decline in 2009.

Gartner is now projecting a recovery in fab equipment spending in 2010 through 2012. Spending is expected to grow 16.3% in 2010 and reach US$19.35 billion. However, this is still significantly below projections for 2008, with spending of US$24.86 billion. Spending is expected to reach 2008 levels in 2011 of US$25 billion and reach US$29.7 billion in 2012. However, this figure is still close to 20% below spending levels reached in 2007.

Based on Gartner’s revised wafer fab equipment forecast, a steep decline in spending in 2008 and 2009 will be replaced with strong growth starting in 2010, but spending is not expected to reach 2007 levels within the forecast period.

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