SEMI hikes 2006 equipment forecast, but 2007 now seen flat

July 11, 2006 – Semiconductor growth has been very strong in 2006 so far, with “tremendous” demand for tools, particularly in North America, according to SEMI’s Stanley Myers, discussing the group’s midyear outlook for semiconductor equipment and materials during a lunch panel presentation during the first day of SEMICON West on Monday, July 10.

SEMI now pegs the overall equipment segment at $38.81 billion, growing 18.0% from 2005, roughly double the rate SEMI forecasted in its year-end projections in December. Wafer processing sales are seen growing nearly 20% to $27.42 billion this year, almost triple the rate forecasted six months ago. Smaller increases in growth are also projected for assembly and packaging equipment (11.7%, to $2.38 billion).

However, SEMI has slashed its outlook for 2007, similar to a recent outlook from Gartner Inc. SEMI now expects total equipment sales to rise just 1.4% in 2007 to $39.36 billion, instead of a previously projected 12.3% increase. The outlook for wafer processing sales, as well as the catch-all “other” category, have been cut from 12%-13% growth to just about flat for the year, while the assembly/packaging segment will slip 1.7% instead of a previously forecasted 13.4% increase.

The big story so far in 2006 is strong bookings growth in all regions, but particularly in North America, which enjoyed 71% year-on-year growth in equipment bookings from Jan-May, according to Stanley Myers, president and CEO of SEMI. Demand is heavy due to domestic facility investments from IBM, IM Flash (Micron and Intel’s JV), Intel (Fab 12 and 32), Micron (Fab 6), Qimonda (Infineon’s former memory unit), and TI. He noted strong end-market demand for ICs is being fueled by consumer electronics, inventories remain stable, capacity utilization rates are strong, and silicon shipments are at an all-time high. — J.M.


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