SAN FRANCISCO – Semiconductor equipment sales will grow more than 12% this year to $44.33 billion, according to mid-year SEMI projections.

The SEMI Capital Equipment Forecast, released yesterday at the annual SemiCon West trade show, notes 2011 is likely to be the second-highest spending year in history, second only to the $48 billion spent in 2000.

The anticipated growth follows a 148% jump in 2010.

Next year, the equipment market is expected to fall about 1.2%, SEMI forecasts. Wafer processing equipment spending is forecast to decline 2%, offset in part by low single-digit growth in the Test and Assembly equipment markets is expected.

"Semiconductor equipment manufacturers will still see a double-digit increase in spending for 2011 following a phenomenal recovery year with triple-digit growth in 2010," said Stanley T. Myers, president and CEO of SEMI. "We expect worldwide equipment sales to remain at high levels in 2012.”

Wafer processing equipment, the largest product segment by dollar value, is expected to increase 18.8% in 2011 to $35.1 billion. The forecast predicts that the market for both test and assembly equipment will contract in 2011, with semiconductor test equipment forecasted to decline 5.5% (to $3.92 billion) and assembly and packaging forecasted to decline 18% to $3.18 billion.

Growth is forecasted for all regions in 2011 with Taiwan expected to be the largest market for equipment spending in both 2011 and 2012. In 2011, North America will be the second-largest market in equipment spending ($9.25 billion), with an almost 61% increase in spending over the previous year. Korea will be third in terms of equipment spending ($7.98 billion).

Table 1 shows the market size in billions of US dollars and percentage growth over the prior year.

Table 1. Forecast by Equipment Segment and by Region