Gartner: 2011 capex softer, 2012 messy

September 30, 2011 – Semiconductor equipment spending in 2011 looks to be slightly weaker than anticipated, and is looking a lot softer in 2012 across the board, according to Gartner’s new semiconductor capex forecasts.

Compared with the firm’s June 15 outlooks, investments are looking a bit softer in 2011, now at about a 9% clip overall to $61.83B, instead of 12%. Within that, capital equipment is seen around 7% (vs. 10% previously), as wafer-fab equipment (WFE) investments are slightly more busy than on the backend which is seen roughly flat or down slightly.

The big changes are in 2012, where Gartner sees nearly a -17% decline in total spending to $51.53B (vs. what had been seen as just a -3% slip), with even bigger dropoffs "across the board" (nearly -20% in some cases) Foundries are still spending on their 28nm ramp, but slowing spending on everything above that (90nm through 45nm), and in some cases reusing those older-node tools to help prop up capacity utilization, notes Gartner managing VP Klaus Rinnen in a statement. Another factor: media tablet production has been a little weak (Apple is rumored to be throttling back on its iPad output), softening the NAND market which had been partly offsetting a woeful year for DRAM.

Gartner sees the current slowdown extending into 1H12, by which point supplies and demand should be better balanced, PC demand should rebound, and (hopefully) macroeconomic factors stabilize enough to spur consumer purchasing confidence — and thus DRAM makers and foundries will have to start spending again. 2013 should be a better growth year; Gartner now sees 18% for total semiconductor capital spending, more than double its previous 9% outlook. That upswing is seen to extend into 2014, where Gartner now sees slight 2% growth vs. a -15% decline; 2015 would then be the next true "down" year for industry spending at -5.1% (vs. a previously-expected 14% rise).

By specific equipment segment, here’s what Gartner is forecasting:

WFE: 9.2% in 2011, -19.6% in 2012. Slowing revenue started in 2Q11 and accelerating through 2H11, pressured by slowing device sales and inventory liquidation. Leading-edge equipment areas doing best are immersion litho, etch, deposition (segments involved in double patterning), and "critical leading-edge logic processes." Demand for 200mm equipment will continue to be strong for analog and discrete devices needed for mobile devices’ power and energy management functions.

Packaging/assembly: -1.4% in 2011, -17.5% in 2012. Orders have softened "more aggressively than previously expected" as supplies are worked down to be "in line with expectations," Gartner says. Among backend process capex purchases, hot areas continue to be 3D packaging and Cu wire bonding, though "at a reduced pace." Most major tool segments will see slightly negative sales in 2011, but advanced tooling will outperform the broader market. For 2012, advanced packaging segments shouldn’t fall as badly as traditional tooling segments.

Automated test: 0.4% in 2011, -18.1% in 2012. Growth will be essentially flat this year, but driven by SoC demand and advanced RF. Look for a pullback in memory ATE due to soft DRAM capex, though NAND test should be stronger than the general memory test market. For 2012 Gartner sees "a significant decline in tester sales," though with memory systems "hold[ing] up reasonably well" as DRAM capex returns.

Worldwide semiconductor capital equipment spending forecast, in US $B. (Source: Gartner)


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