Semiconductor Industry Expects Slowdown

Technology researcher Gartner Inc. says chip spending in 2008 will be flat.

SAN FRANCISCO (AP) — Makers of semiconductor manufacturing equipment can count on the current order slowdown to extend well into next year, technology researcher Gartner Inc. said Wednesday.
Gartner cut its 2008 global spending outlook for chip equipment to $43.7 billion (euro30.79 billion), down 4.3 percent from its mid-July forecast of $45.7 billion (euro32.19 billion). Based on its present spending estimate for 2007, chip-equipment spending would be flat in 2008.
The researcher previously anticipated spending would increase 6.2 percent year-over-year.
Gartner said spending on machines to make computer memory will drop, while flash makers and third-party chip contractors will order more equipment.
The market for equipment that makes computer memory has faced an inventory glut this year, sparking a steep decline in average selling prices for the memory chip widely used in personal computers. South Korean Hynix Semiconductor Inc., the world's No. 2 producer by sales in that market, said this week that it stopped supplying the chips to the open market in a bid to shore up plummeting prices.
Signs are emerging that chip makers are planning to spend less in 2008.
Micron Technology Inc., the world's No. 5 maker of computer memory equipment by total sales, said Tuesday that its 2008 capital expenditure budget would be $2.5 billion (euro1.76 billion), down from $4 billion (euro2.82 billion) in fiscal year 2007.
Gartner also revised its total semiconductor capital spending forecast for 2008 to $54.6 billion (euro38.46 billion), down from $59.3 billion (euro41.78 billion).
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