Global semiconductor industry slows

Spending on semiconductor equipment expected to shrink 19.2%

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Global semiconductor industry slows Gartner says the global spending on semiconductor capital equipment is expected to decrease 19.2% to $35.2 billion in 2012 from projected 2011 spending of $43.5 billion.
By  Georgina Enzer Published  October 2, 2011

Global spending on semiconductor capital equipment is expected to decrease 19.2% to $35.2 billion in 2012 from projected 2011 spending of $43.5 billion, according to Gartner.

Gartner said that this decline is due to excess electronics inventory and poor demand as a result of the slowing macro economy.

"The slowdown appears to be across the board. While it appears the foundries will continue their capacity race at 28 nanometers [nm], spending on 45 to 90nm technologies is slowing, and some equipment from those technology nodes is being used for 28nm production to help increase capacity utilisation," said Klaus Rinnen, managing vice president at Gartner. "Due to weaker-than-expected growth in the production units of media tablets, NAND spending has softened slightly, as well."

Gartner is expecting the slowdown to last for the remainder of 2011 and into the first half of 2012, but begin to recover by mid-2012.

According to Gartner, DRAM and foundry will need to begin to increase spending to meet an increase in demand as the PC market rebounds and consumers begin spending once the economy stabilises a bit in mid-2012.

The next growth year is expected to be 2013, when capital spending will increase by 18.4%.

Worldwide wafer fab equipment (WFE) revenue began slowing in Q2 2011, and the decline is expected to accelerate in the second half of 2011 with the added pressure of slowing device sales and excess inventory liquidation.

Global WFE revenue is forecast to grow 9.4% in 2011, but decline 19.6% in 2012.

Worldwide packaging and assembly equipment (PAE) revenue is projected to decline 1.4% in 2011, according to Gartner and decrease 17.5% in 2012.

PAE orders have softened more than previously expected as supply comes in line with expectations.

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