Semiconductor capital equipment spending to decline by 19.2 per cent in 2012: Gartner [Nov 2011]

November 25, 2011 6:24 am

According to Gartner, the global semiconductor capital equipment spending is expected to total $ 35.2 billion in 2012, a 19.2 per cent decline from projected 2011 spending of $ 43.5 billion. “Excess electronics inventory and poor demand as a result of the slowing macro economy are to blame for the declining spending”, the report points out.
“The slowdown appears to be across the board. 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 utilisation,” said Klaus Rinnen, Managing Vice President at Gartner. “Due to weaker-than-expected growth in the production units of media tablets, NAND spending has softened slightly, as well.”
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, so DRAM and foundry will need to begin to increase spending to meet an increase in demand as the PC market rebounds and consumers begin spending once the economy stabilises a bit. “The next growth year is expected to be 2013, when capital spending will increase by 18.4 per cent”, the report said.According to Gartner, the 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 with the added pressure of slowing device sales and excess inventory liquidation. WFE revenue is forecast to grow 9.4 per cent in 2011, but decline 19.6 per cent in 2012. The need for leading-edge equipment is benefiting immersion lithography, etch, certain segments in deposition involved in double patterning, and critical leading-edge logic processes. Leading edge is not the only benefactor of expanding mobile media markets. Analog and discrete devices needed for power management and energy management will drive the need for 200 mm equipment.