Worldwide semiconductor capital equipment spending is projected to total $43.7 billion in 2007, a 4.1% increase from last year, according to the latest forecast by Gartner, Inc. This represents a slower rate of growth for the industry this year and looking to 2008 spending is expected to increase just 0.3%, essentially flat growth.
"A competitive investment race among dynamic random-access memory (DRAM) vendors that did not abate -- contrary to common sense, despite rampant overcapacity -- combined with an accelerated retooling with more cost-effective 300-mm capacity, fuelled a strong first half that is tailing over into the second half of the year," said Dean Freeman, research vice president for Gartner's semiconductor manufacturing group
Furthermore in 2008 Gartner predicts a slightly positive outlook for capital expenditure (capex) while wafer fab equipment (WFE) will be slightly negative. The outlook for back-end equipment markets remains positive. WFE revenue is forecast to grow 6.4% in 2007.
The 45-nanometer (nm) technology node is beginning to ramp up in 2007 as Intel starts initial production and as foundries make this level of technology available to their customers, says Gartner. However, investments in 65-nm and 90-nm production dominate the spending picture, as does equipment for DRAM and NAND flash, which will account for more than half of the total spending for new equipment. Memory-related spending will continue to dominate equipment demand and define market directions in 2008.
After growing more than 18% in 2006, packaging and assembly equipment (PAE) market revenue will decline about 3.5% in 2007, Gartner predicts.
Automated test equipment (ATE) market growth was slightly less than 10% in 2006. In 2007, Gartner analysts expect a modest decline because the ATE market improved throughout the first half of the year. Given relatively strong memory test sales to support double data rate test, and some improvements in system-on-chip (SoC) test sales, Gartner projects revenue for the ATE market to decline 4.8% this year. In 2008, a modest recovery with growth of slightly more than 7% is expected.