According to research from Gartner Inc., the worldwide semiconductor market is expected to remain relatively flat in 2007, with growth resuming in 2008.
For 2006, semiconductor capital equipment spending increased 24.9 percent, but for 2007, revenue is seen decreasing by 0.7 percent, the research showed. Spending is expected to increase by almost 21 percent in 2008.
“In 2006, slowing logic-related demand from integrated device manufacturers (IDMs) and foundries alike was offset by strong commodity memory investments, resulting in healthy growth for the semiconductor capital equipment industry,” said Klaus Rinnen, managing vice president for Gartner’s semiconductor manufacturing and design research group.
Rinnen continued: “In 2007, a softer macroeconomic sales environment for electronics combined with excess semiconductor inventories and strong 2006 capacity investments will cause a small contraction in equipment demand, but it will not be a collapse in demand.”
For 2007, Gartner expects wafer fab equipment to drop to 0.6 percent growth from 2006’s 26.3 percent. Gartner also sees a decrease in growth of 5.7 percent for packaging and assembly equipment (PAE) and a decrease of 5 percent for automated test equipment (ATE). For 2008, however, Gartner anticipates 26 percent growth for the PAE market.
“The driver of investments in 2007 is a combination of a revival of logic-related capacity investment as the year progresses and continued strength in commodity memory,” Rinnen said. “In fact, our current statistics show that memory spending could potentially reach a new high, accounting for 50 percent of total capital spending. And therein lays the biggest risk and volatility for 2007.”
