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December 15, 2011

Global semiconductor capital equipment spending to decrease 19.5% in 2012: Gartner

Capital equipment spending is expected to decrease from $51.7bn in 2012 from projected $64.2bn spending in 2011

By Vinod

Global semiconductor capital equipment spending is expected to decrease by 19.5% to reach $51.7bn in 2012 from projected $64.2bn spending in 2011, according to IT research firm Gartner.

The slowdown is expected to last through the second quarter of 2012, by then the supply and demand should be in balance with the semiconductor side, the research firm added.

In the balanced phase, spending will be increased DRAM and foundry to meet an increase in demand as consumers resume spending and the PC market rebounds.

Gartner expects that 2013 is likely to be the next growth year, with capital spending growing 19.2%.

Gartner managing vice president Klaus Rinnen said natural disasters and the economy have certainly impacted the semiconductor capital equipment market in 2011, but they expect equipment spending to increase 13.7% in 2011.

"However, equipment providers will not be as lucky in 2012. The impact of the slowing macro economy, high inventories and a sluggish PC industry — due to both weak demand and the flooding in Thailand — will temper the outlook for 2012," Rinnen said.

A growth of 9.8% is expected in wafer fab equipment (WFE) revenue in 2011, while a decline of 22.9% is expected in 2012, which may rebound to 23.7% growth in 2013, according to Gartner.

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The high-priced 193 nm immersion lithography segment and associated equipment in the lithography cell are benefitting in 2011 from the continued demand for leading-edge WFE technologies, which will primary basis of WFE spending in 2012, as the 20 nm and 28/32 nm ramp-ups continue.

Gartner believes advanced tooling will again be stronger than the general market in 2011, but most major tool segments will see slightly negative sales in 2011.

Substantial declines in sales of traditional tooling segments will be experienced in 2012, while advanced packaging segments are expected to fall less than is traditional when compared with 2011.

A modest decline is expected in the automated test equipment (ATE) market in 2011 compared to 2010, with memory ATE likely pull back in 2011, while NAND testing platforms are expected to be stronger than the general memory test market this year.

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