Semi equipment market to double

Market forecaster Gartner claims worldwide spending on the equipment used to make semiconductors will have increased by 122.1 percent by the end of this year, from $16.6 billion last year to $36.9 billion.

Next year, growth will be a comparatively dull 4.9 percent. Nonetheless, shareholders of ASM and Applied Materials ought to be happy. 

Automated test equipment will experience the highest growth rate, rising 144 percent from $1.5 billion to $2.8 billion. Chip makers will also splash out $6.05 billion for packaging and assembly equipment, compared to a meagre $2.7 billion in 2009, the industry’s worst years ever.

Spending on wafer fab equipment grew 119.9 percent, from $12.7 to $28 billion – despite Gartner doing its worst to present its figures in an ancient Greek writing style making it look as if it could have been $8 billion instead on first glance.

“Capital expenditure (capex) is above 95 percent due to strong spending by the foundry and logic segments, along with a technology upgrade for the memory manufacturers. In 2011, capex growth is expected to slow to 10 percent, because a slowing economy will negatively impact electronic and semiconductor sales,” said Gartner VP Klaus Rinnen.

In addition, Rinnen also warned companies should prepare for the next down cycle, which is prophesied to start in late 2012. He claims memory makers will have spent too much money on too many machines, meaning new orders will dry up.

As for capacity, Gartner reckons utilisation rates hit 94 percent in this year’s second quarter, but will fall back to 90 percent as more capacity goes online.