December 20, 2007 – Semiconductor equipment spending will slip 9.9% in 2008 in large part due to measures taken to absorb memory oversupplies, though the second half of the year should pick up strength and set the stage for a return to growth in 2009, according to the latest figures from Gartner.
After enjoying double digit growth in the 20% range in 2006, spending for most equipment categories has slowed to single digits in 2007, according to Gartner (see table below). Total capex will increase about 6.8% to $44.8B, with wafer fab equipment (WFE) investments up about 9%, and flat to slightly declining investments in final manufacturing (packaging/assembly -0.3%; automated test -1.9%). The PAE forecast has improved somewhat (vs. recent outlook of -3.5%) due to better spending from semiconductor assembly and test services (SATS) players, but it seems that won’t extend into 2008.
Next year, Gartner forecasts all major segments of the equipment market to see lower spending. Equipment spending will decline nearly 10%, and total capital spending more than -13%, with ~10% declines in WFE and PAE, and only slightly better for ATE (-7.8%).
A “long overdue capital spending correction in the DRAM market” is the main culprit behind the equipment market contraction, notes Klaus Rinnen, managing VP for Gartner’s semiconductor manufacturing group, in a statement, adding that another slow year from foundries and a generally more cautions spending mood, with rising concerns about a US recession.
Gartner sees a weak first half as DRAM companies slow down investments to get supply/demand balance under control, more than offsetting increased spending for NAND flash. But foundries pushing to the next technology node will lead a rebound in 2H08, along logic investments.