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March 7, 2010

Global semiconductor capital equipment spending to exceed $29.4bn in 2010: Gartner

New technology nodes and spending by memory and foundry markets to drive the segment

By CBR Staff Writer

?Worldwide semiconductor capital equipment spending is expected to surpass $29.4bn in 2010, an increase of 76.1% compared to $16.7bn in 2009, according to a new report from Gartner.

All segments of the semiconductor capital equipment market are expected to experience double-digit growth in 2010, following significant declines in 2009, Gartner said.

According to the report, the overall worldwide wafer fab equipment (WFE) spending declined 46.4% in 2009, but is expected to grow by 76.6 % from 2009 driven by aggressive technology upgrades. The packaging and assembly equipment (PAE) market which declined 40 % in 2009, is expected to increase by more than 75% in 2010, but is projected to decline by modest margins in 2013.

Gartner estimates leading-edge utilisation to hit mid-90-% range by the end of 2010, which will start to drive stronger capacity additions in 2011. On a regional basis, Asia/Pacific region which has about 77% of PAE shipments in 2010, is expected to account for nearly 85% of all PAE sales by 2014.

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The research firm said that China will occupy the top slot as the largest individual consumer of PAE in 2012, accounting for nearly 27 % of the total market. After bottoming out in the first quarter of 2009, the ATE market has realised substantial quarterly gains and is expected to grow by more than 70 % in 2010. Growth is expected to continue during the next several quarters as device demand improves. By 2014, shipments to Asia/Pacific will grow to nearly 80 % of the ATE market.

Jim Walker, research vice president at Gartner, said: Spending by the memory and foundry markets, along with the advancement to new technology nodes, will drive the semiconductor equipment segment in the first half of 2010. Quarterly growth will see a slight slowdown in the second half before capacity additions start ramping up the equipment industry again going into 2011.

The semiconductor equipment industry will experience a very strong growth spurt in 2010, as we emerge from a very costly recession, and this growth is expected to continue throughout 2012.

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