Global semiconductor capital equipment spending to decline 19.2 percent in 2012

Worldwide semiconductor capital equipment spending is
expected to total $35.2 billion in 2012, a 19.2 percent decline from projected
2011 spending of $43.5 billion, according to Gartner.


Excess electronics inventory and poor demand as a result
of the slowing macro economy are to blame for the declining spending.

“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 90 nm technologies is slowing, and some equipment from
those technology nodes is being used for 28 nm production to help increase
capacity utilization,” 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,” Rinnen added.

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

Worldwide wafer fab equipment (WFE) revenue started
slowing in the second quarter of 2011, and the decline will accelerate in the
second half of 2011 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. 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. Leading edge is not the
only benefactor of expanding mobile media markets. Analog and discrete devices
needed for power management and energy management will drive the need for
200-millimeter (mm) equipment.

Worldwide packaging and assembly equipment (PAE) revenue
is projected to decline 1.4 percent in 2011 and decrease 17.5 percent in 2012.
Orders for PAE have softened more aggressively than previously expected as
supply comes in line with expectations. For back-end process providers’ capital
expenditure (capex) purchases, 3D packaging and copper wire bonding for
lower-cost solutions will still be the focus, but at a reduced pace. Most major
tool segments will see slightly negative sales in 2011, but advanced tooling
will once again be stronger than the general market this year. 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.

For 2011, the automated test equipment (ATE) market is
expected to remain essentially flat with revenue growth at 0.4 percent. The
market has been driven by the continued demand of system-on-chip and the
advanced radio frequency segments of the market. Memory ATE will likely pull
back in 2011 as DRAM capex softens. However, 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.

By Team
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