SEMI slashes three-year growth forecast

by Phil LoPiccolo, Editor-in-Chief, Solid State Technology

SEMI’s new mid-year 2007 capital equipment revenue forecast, unveiled during its annual opening day press conference at SEMICON West 2007 in San Francisco, predicts sharply reduced growth projections for the next three years, compared to figures released in the association’s year-end 2006 forecast.

SEMI’s prior forecast estimated overall market growth rates of 3.7% in 2007, 13.3% in 2008, and 5.4% in 2009. But now, in its latest Capital Equipment Consensus Forecast, based on recent interviews with leading equipment suppliers, the group projects slower growth rates in all three years of its forecast — dipping to 1.1%, 6.5%, and 4.4%, respectively, over the same three-year period.

Despite the dampened forecast, SEMI president and CEO Stan Myers, pointed out that 2007 would be the second largest year ever for sales of new equipment, growing to approximately $41 billion (after surging 23% last year), thanks to continued investment in 300mm technology and growing investment in 45nm tools. He added that annual sales should reach $45.5 billion in 2009 and grow another 6.6% in 2010 to top $48.5 billion.

Wafer-processing equipment segment is seen experiencing the most significant level of growth this year (3.5% to $29.7 billion), while the market for assembly and packaging will remain flat at $2.5 billion, and sales for test equipment will drop significantly (-7.8% to $5.9 billion), according to the mid-year forecast.

By region, growth in the Taiwan equipment market (20.4% to $8.8B billion) is predicted to outdistance everyone else during 2007, followed by China (14.5% to $2.6 billion) and Korea (0.8% to $7.1 billion). Japan’s growth is expected to rise slightly (0.2% to $9.2 billion), while declines are expected in North America (-8.8% to $6.7 billion), Europe (-8.7% to $3.3 billion), and the rest of the world (-13.8% to $3.2 billion).

Looking ahead into 2008, Taiwan is seen adding another 8.5% in sales to reach $9.5 billion, second in total revenue only to Japan ($9.6 billion), while nearly all other regions are expected to experience single-digit growth. China’s annual equipment revenues are actually projected to decline in 2008 (-3.4%), though it should enjoy bountiful growth in 2009 (35.9%) and 2010 (13.4%), bringing annual equipment sales to $3.9 billion by the end of the decade. At that point, China would surpass Europe ($3.75) and move out of last place in terms of revenue among all regions. — P.L.


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