May 16, 2008 – Comments from Japanese chip equipment execs echo comments from Applied Materials earlier this week suggesting chip industry capex will be soft well into 2H08 and maybe not rebound until early 2009. Not everyone is optimistic yet, though.

“A recovery in the semiconductor market will become clear in the second half of this year, and shipments of chipmaking equipment will pick up in the latter half of fiscal 2008 (the six months through March 2009),” according to Kazuo Ushida, senior executive officer of Nikon, reported by the Nikkei Business Daily.

Chipmakers’ orders are expected to “bottom out” in the current quarter after a 56% Y-Y plunge (to ¥98.3B/US $936.8M), attributed to softness and hesitancy among DRAM makers. TEL saw orders slide Y-Y for four consecutive quarters through the Jan.-March quarter.

But all expectations are that chipmakers will start investing again as a memory prices stabilize and head up again. DRAM supply/demand are expected to balance out by this fall (calendar 3Q08), with a crossover point to heavier demand in calendar 4Q08, which will spur more orders, according to TEL.

“Chipmakers cannot do without investing in advanced areas,” noted Nikon’s Sato. The company expects a 30% hike in immersion tool shipments (to 30 tools) in its fiscal year ending March 2009.

For NAND, a bottom also is projected to be reached “in the near future,” the paper notes, with an anticipated release of new portable music players (which use flash memory) in time for holiday year-end sales.

But not everyone’s as optimistic about a pending recovery — makers of assembly/test equipment are decidedly more conservative, notes the paper. Disco “didn’t make optimistic projections,” said president Hitoshi Mizorogi, “although major memory manufacturers are expected to make strategic investment” later this year to maintain market share. Visibility for the backend of the chipmaking chain is still tough to forecast due to much shorter lead times, and demand for consumables (e.g. those used in wafer dicing) have yet to show signs of recovery, he said. And Advantest earlier this year said it would no longer make earnings projections because it’s now too difficult to foresee demand trends.