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June 21, 2013

Global semiconductor manufacturing equipment spending to drop 5.5% this year

Semiconductor Equipment Market outlook improves, while remains soft in short term.

By CBR Staff Writer

The global semiconductor manufacturing equipment spending is expected to drop by 5.5% during 2013 to $35.8bn, while the capital spending is also expected to decline 3.5% during the year, a new report from Gartner has suggested.

Gartner research VP Bob Johnson said that weak semiconductor market conditions, which continued into the first quarter of 2013, generated downward pressure on new equipment purchases.

"However, semiconductor equipment quarterly revenues are beginning to improve and positive movement in the book-to-bill ratio indicates that spending for equipment will pick up later in the year," Johnson said.

"Looking beyond 2013, we expect that the current economic malaise will have worked its way through the industry and spending will follow a generally increasing pattern in all sectors throughout the rest of the forecast period."

The global semiconductor capital spending in 2014 would increase by 14.2%, followed by 10.1% growth in 2015, with the next cyclical decline of 3.5% in 2016, followed again by a growth in 2017, the research firm projects.

Gartner expects that declining capital spending for all products in 2013 would not vastly affect the logic spending, which would be the strongest segment with only 2% drop compared to 3.5% decline for the overall market.

The memory segment is expected to be weak all through the year, with maintenance-level investments for DRAM and a little losing NAND market until supply and demand balance returns.

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During 2013, Gartner anticipates the foundry segment spending to rise by 14.3%, while both integrated device manufacturers (IDMs), and semiconductor assembly and test services (SATS) providers would decline.

The wafer fab equipment (WFE) market has been witnessing continuous quarter-over-quarter growth in 2013, as major manufacturers emerge from a period of high inventories and a feeble semiconductor market.

Gartner also expects growth in WFE market with double-digit rise in 2014 and 2015, prior to a modest cyclical slump in 2016.

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