Very good ain't bad
01/01/2005
In today’s highly volatile world, nothing is a certainty, but all indications are that 2005 will be a very good year for the contamination control industry. My use of the term “very good” as opposed to “banner” is a considered one, meant to reflect the generally conservative outlook of the industries served, rather than my own personal view of their, or our own, industry’s business prospects.
One thing is clear: The performance of overall national and global economies will play a larger role in the health of the contamination control industry in 2005 than that of any one industry sector. With this in mind, there’s reason for considerable optimism. The Organization for Economic Cooperation and Development (OECD), composed of thirty of the world’s industrialized countries, predicts global growth at 2.9 percent for 2005. And, while this is down from its earlier prediction of 3.4 percent, it’s still a peachy, if not rosy, forecast. The U.S. economy, meanwhile, is expected to grow about 4 percent in 2004, and economists forecast further growth at about 3.5 percent in 2005.
Taking a closer look at some of the major customers of contamination control technology, there’s also no reason for anything but a positive outlook. Not surprisingly, expectations for the mainstream semiconductor industry are once again cautious and mixed, but while chip sales may slow some, nearly all analysts point to a need for increased capital equipment investment over the next 1 to 2 years. Vijay Rakesh, director and senior research analyst for Next Generation Equity Research in Chicago still looks to see 20 to 25 percent growth in capital equipment investment in 2005 over 2004.
The bio/pharmaceutical industry remains strong, and for all the reasons frequently cited on this page, promises to be an increasingly large and immediate user of new contamination control technology and products in its manufacturing environments. And, this industry has nowhere to go but forward. According to the Wall Street Journal, in the decade that ended in 2002, U.S. bio/pharmaceutical R&D expenditures nearly tripled to $26 billion while Europe’s spending doubled to $21 billion, with all expectations pointing to this trend continuing.
In fact, increased R&D spending across the board is perhaps the greatest factor pointing to a successful 2005 for the contamination control industry. While global industry may be dragging its feet in breaking ground for or equipping mammoth new production facilities, there’s no doubt that these projects will be coming in the near future. IC Insights observes that the top three semiconductor industry spenders in 2004, Samsung, Intel, and Taiwan Semiconductor Manufacturing Co., have yet to announce their 2005 capital spending intentions, while four or five new 300-mm plants are on the horizon, including those at Micron, Sony, SMIC, and Texas Instruments. In the meantime, however, industry, government and university spending on new laboratory, research and pilot manufacturing facilities has never been greater.
The President’s proposed FY 2005 budget calls for an increase in federal R&D investment to a record $132 billion, compared to $91 billion in FY 2001. This places federal R&D spending for the year at the greatest share of GDP in over ten years. For nanotechnology alone, Research and Markets projects R&D investment by government organizations will continue to increase worldwide, with at least thirty countries initiating national activities in the field running the gamut of physical, biological, and engineering sciences. The U.S. government alone has approved plans to allocate $2.36 billion to nanotechnology programs over the next three years, in addition to substantial individual state funding programs.
So, while it may not begin or end with great expectations, hoopla or celebration, if slow and steady wins the race, then 2005 promises to be an example year for a steadily advancing and healthy contamination control industry. And that ain’t bad at all.
-J.S.H.