October 25, 2007 – After touching a trough in 3Q07, semiconductor equipment sales should head back up with small positive growth over the next several quarters, according to market analysis firm The Information Network.

“The upturn has started” for the semiconductor equipment market, writes Robert Castellano, president of the firm. After what he still sees as a 4% drop in 2007, the equipment market should head back up in 2008 and 2009. DRAM prices that have slumped all year (and impacted capex) should recover by mid-2008, he notes.

Castellano also raised his outlook for chip equipment sales in 2009, from about flat growth (-0.1%) to a 5% increase.

It’s not all good news, though. A handful of macroeconomic factors, including a still-soft housing market, credit/subprime mortgage crisis, high oil prices, and fears of a recession are pushing down on growth projections. Also, a mixed bag of recent capex announcements have caused the firm to halve its 2008 projections to just 11% growth.

A big factor in that 2008 growth is Samsung’s intent to boost capital spending in 2008 by 25%, a move that’s “all about market share,” Castellano writes. He notes that Hynix more than doubled (+125%) its DRAM sales from 1Q06-1Q07 a year after an equal hike in capex the year before. Powerchip and ProMOS also invested heavily in that period (+38% and +45%), which resulted in similarly impressive growth in DRAM sales (+103%, +87%), he added.