SAN FRANCISCO – Makers of semiconductor production equipment and materials can look forward to the market for their wares growing 19% sequentially this year and 10% next year to reach $40 billion, the highest level since 2000.

The forecast was disclosed this week at the SemiCon West trade show by Strategic Marketing Associates. According to SMA president George Burns, the double-digit growth for this year and next is being fueled by rising levels of new wafer fab construction that began in 2004 and is expected to crest in 2007. “We see the industry bringing 35 new fabs online by end of 2007 with a total equivalent capacity, when fully ramped, of more than 2 million 200mm diameter wafers per month. Representing more than 15 acres of silicon, this monthly output is roughly equal to 18% of industry's theoretical full capacity today.”


He noted that as semiconductor equipment and materials purchases top $40 billion in 2007, overall capital spending by wafer fabs worldwide will reach an all-time high of $62 billion.

Most of the new capacity and spending will be for processing 300mm diameter wafers, especially to meet demand for DRAM and flash memory. As many as 14 memory fabs will come online in 2007. Fully two thirds of all capacity coming online then will be for memory, the firm said. Based on existing plans, FabFutures forecasts memory manufacturers will spend more than $20 billion in 2007 to equip new fabs.

U.S. wafer fabs collectively will continue to outspend wafer fabs collectively based in any other country. “The U.S .as a region continues to be quite competitive in attracting new fabs,” said Burns. “The U.S. is not only attracting U.S. companies such as AMD to build a fab in New York, but it is also attracting offshore investments by companies such as Korea based Samsung and Germany based Qimonda (Infineon) to build wafer fabs in Texas and Virginia, respectively.”

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