March 21, 2006 – Worldwide sales of semiconductor manufacturing equipment dipped 11% in 2005 following significant expansion in 2004, but it was still the third-strongest year in history for suppliers overall, according to new data from SEMI.

Chip tool sales totaled $32.88 billion in 2005, vs. $37.08 billion in 2004. Sales were down across the board by tool type, but were slowest among the backend segments. Wafer processing equipment shrank 10%; the assembly and packaging segment declined 13%; and total test equipment sales decreased 17%.

By region, South Korea showed the best growth (26%) during the year, surpassing Taiwan to become the second largest equipment market behind Japan, which contracted 1%. Taiwan, which led world growth in 2004 by more than doubling its equipment spending, declined 23% in 2005, and is now in a virtual tie for the third-largest market with North America (which declined -1.9% during the year).

China also followed a period of heavy investment in 2004 with a slowdown in 2005, experiencing a 50% decrease. The Rest of World region, which aggregates Singapore, Malaysia, Philippines, other areas of Southeast Asia and smaller global markets, declined 36%, while Europe dipped about 5% during the year.

Semiconductor capital equipment sales, 2004-2005 (US $M)

Region 2004 2005 % change

China 2683 1327 -50.5
Europe 3444 3262 -5.3
Japan 8276 8183 -1.1
South Korea 4614 5826 26.3
North America 5812 5702 -1.9
Taiwan 7762 5722 -26.3
Rest of World 4490 2862 -36.3
Total Regions 37,081 32,884 -11.3

WaferNews source: SEMI