Circuits Assembly Online Magazine - Gartner Forecasts 113% Rise in Semi Gear Spending

STAMFORD, CT — Worldwide semiconductor capital equipment spending is projected to reach $35.4 billion in 2010, a 113.2% sequential increase according to Gartner.

The research firm warns equipment vendors should prepare for slower growth heading into 2011, however, forecasting 6.6% growth next year.

"The drive to new technology nodes will drive semiconductor equipment growth in 2010," said Klaus Rinnen, managing vice president at Gartner. "The demand for 40-nm and 45-nm devices is now ramping up, resulting in heavy foundry-based capital spending."

"We could see a slight slowing in orders as 2010 ends, and the industry focuses on macroeconomic conditions. We expect capital equipment growth to continue through 2011, but at a reduced rate, as spending responds to slower growth in the semiconductor markets," Rinnen said.

Following the significant declines in 2009, all segments of the semiconductor capital equipment market will experience exceptionally strong growth in 2010.

Worldwide Semiconductor Capital Equipment Spending Forecast 2009-14 ($ millions)

	2009	2010	2011	2012	2013	2014
Semiconductor Capital Spending	25,876.3	47,495.3	54,079.6	58,273.8	51,735.6	49,399.1
Growth (%)	-41.2	83.5	13.9	7.8	-11.2	-4.5
Capital Equipment — Includes Test	16,606.1	35,412.3	37,732.3	40,822.7	34,881.9	34,619.7
Growth (%)	-45.8	113.2	6.6	8.2	-14.6	-0.8
Wafer Fab Equipment	12,747.7	27,188.3	29,132.4	32,984.0	29,325.9	28,446.1
Growth (%)	-47.4	113.3	7.2	13.2	-11.1	-3.0
Packaging and Assembly Equipment	2,708.5	5,544.0	5,581.8	4,995.6	3,437.6	3,879.3
Growth(%)	-32.3	104.7	0.7	-10.5	-31.2	12.9
Automated Test Equipment	1,149.8	2,680.0	3,018.1	2,843.0	2,118.5	2,294.3
Growth (%)	-53.0	133.1	12.6	-5.8	-25.5	8.3
Other Spending	9,270.2	12,083.0	16,347.3	17,451.1	16,853.7	14,779.4
Growth (%)	-30.7	30.3	35.3	6.8	-3.4	-12.3

Source: Gartner (June 2010)

The wafer fabrication equipment segment will increase 113.3% in 2010, followed by 7.2% growth in 2011. Gartner believes that strong global demand for semiconductors, along with underinvestment in 2008 and 2009, has led to pent-up demand for equipment, and overall utilization rates will peak in the third quarter of 2010. Then the market will start a slow decline as more capacity comes on line and quarter-on-quarter demand will return to more-normal levels.

After declining 32% in 2009, packaging and assembly equipment sales will increase 104.7% in 2010 and 0.7% in 2011. During the forecast period, certain equipment segments will have substantially higher growth. Demand for equipment for advanced processes, such as wafer-level packaging, 3D processes and TSV manufacturing, is expected to grow faster than the overall market. Inspection and process control tools for these advanced packages will also grow above the market rate.

The worldwide automated test equipment market will grow more than 133% in 2010. The ATE market bottomed in the first quarter of 2009 and has realized substantial quarterly gains since that time. Growth has accelerated through the first quarter of this year and is expected to make sizeable gains through the third quarter, bringing the overall test market its first growth year since 2006. While the ATE market will grow substantially this year, it fell to very low levels last year, with the memory test segment declining below the $200 million mark.