Worldwide semiconductor capital equipment spending will total about $35.2 billion in 2012, representing a 19.2 percent decline from the projected 2011 total of $43.5 billion, according to the latest forecast from market research firm Gartner Inc.
Gartner blames excess electronics inventory and poor spending demand as a result of the slowing macro economy for the anticipated decline.
"The slowdown appears to be across the board," said Klaus Rinnen, managing vice president at Gartner, in a statement. "While it appears the foundries will continue their capacity race at 28 nanometers (nm), spending on 45- to 90-nm technologies is slowing, and some equipment from those technology nodes is being used for 28-nm production to help increase capacity utilization.".
Rinnen said capital spending by NAND memory chip makers has also softened due to weaker-than-expected growth in the production of media tablets.
Gartner said its analysts expect the slowdown to last for the remainder of 2011 and into the first half of 2012. By mid-2012 Gartner expects the supply and demand to be more in balance, so 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 stabilizes a bit.
Gartner predicts that semiconductor industry capital spending will increase in 2013 by 18.4 percent.
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Gartner said worldwide wafer fab equipment (WFE) sales began slowing in the second quarter and the firm expects the decline to accelerate in the second half of the year with the added pressure of slowing device sales and excess inventory liquidation. WFE revenue is forecast to grow 9.4 percent in 2011, but decline 19.6 percent in 2012, Gartner said.
The need for leading-edge equipment is benefiting immersion lithography, etch, certain segments in deposition involved in double patterning, and critical leading-edge logic processes, Gartner said. Analog and discrete devices needed for power management and energy management will also drive the need for 200-mm equipment, according to the firm.
Worldwide packaging and assembly equipment (PAE) revenue is projected to decline 1.4 percent in 2011 and decrease 17.5 percent in 2012, Gartner said. Orders for PAE have softened more aggressively than previously expected as supply comes in line with expectations, according to the firm.
For back-end process providers’ capex purchases, 3-D packaging and copper wire bonding for lower-cost solutions will still be the focus, but at a reduced pace, according to Gartner. Most major tool segments will see slightly negative sales in 2011, but advanced tooling will again be stronger than the general market this year, the firm predicted. For 2012, traditional tooling segments will see a sizable decline in sales, while advanced packaging segments are expected to fall less than traditional when compared with 2011, Gartner said.
The automated test equipment (ATE) market is expected to remain essentially flat with revenue growth at 0.4 percent in 2011, Gartner said. This market has been driven by the continued demand of system-on-chip and the advanced radio frequency segments of the market, according to the firm. Memory ATE will likely pull back in 2011 as DRAM capex softens, Gartner said, but NAND testing platforms are expected to be stronger than the general memory test market this year. For 2012, analysts expect a significant decline in tester sales, though memory systems should hold up reasonably well compared with most cycles as DRAM capex returns, Gartner said.
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