Global semiconductor capital equipment spending will reach $35.2bn in 2012, a 19.2% decline from projected 2011 spending of $43.5bn, according to It resaerch firm Gartner.
The company has blamed excess electronics inventory and poor demand as a result of the slowing macro economy for the declining spending.
Gartner expects the slowdown to last for the remainder of 2011 and into the first half of 2012. By mid-2012 Gartner expects the supply and demand to be more in balance, as the PC market rebounds and consumers begin spending once the economy stabilizes a bit. The next growth year is expected to be 2013, when capital spending will increase by 18.4%, according to Gartner.
The company said that worldwide wafer fab equipment (WFE) revenue started slowing in the second quarter of 2011, and the decline will accelerate in the second half of 2011. WFE revenue is forecast to grow 9.4% in 2011, but decline 19.6% in 2012.
Gartner preedicts worldwide packaging and assembly equipment (PAE) revenue will decline 1.4% in 2011 and decrease 17.5% in 2012.
For 2011, the automated test equipment (ATE) market is expected to remain essentially flat with revenue growth at 0.4%, said Gartner. For 2012, analysts expect a significant decline in tester sales, though memory systems should hold up reasonably well compared with most cycles as DRAM capex returns.
Gartner managing vice-president Klaus Rinnen said the slowdown appears to be across the board.
Rinnen continued, "While it appears the foundries will continue their capacity race at 28 nanometers (nm), spending on 45 to 90 nm technologies is slowing, and some equipment from those technology nodes is being used for 28 nm production to help increase capacity utilization.
"Due to weaker-than-expected growth in the production units of media tablets, NAND spending has softened slightly, as well."
