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Equipment sales to grow 18 percent this year

Posted: 12 Jul 2006 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductor? SEMI? Semiconductor Equipment and Materials International? Semicon West? XX?

Following an 11.3 percent decline in 2005, sales of semiconductor capital equipment will grow 18 percent to $38.8 million in 2006, according to the mid-year forecast by global semiconductor association SEMI, presented at the Semicon West exposition.

The forecast, based on interviews of global semi equipment industry participants conducted between late May and June 2006, expects the market to show flat growth in 2007, but resume double-digit growth to reach $44.1 billion in 2008.

At a time when uncertainty is perhaps the best term to describe the state of the electronics industry, SEMI's forecast lends a positive spin to an industry sector where some companies have seen less-than-stellar financial results and have not been immune to the controversy surrounding the backdating of stock options.

"Favorable economic conditions, increased demand for semiconductor devices and stable inventory levels have stimulated capital investment by the world's chip makers in the first half of the year," said SEMI president and chief executive Stanley Myers. He noted that capacity utilization soared over 90 percent the first quarter in 2006, with monthly wafer shipments reaching record levels.

SEMI's mid-year consensus forecast indicates that the wafer processing equipment segment will experience the most significant growth in 2006, rising an estimated 20 percent to $27.4 billion. The market for assembly and packaging equipment will grow 11.6 percent to $2.4 billion, while the semiconductor test equipment market is projected to grow 14 percent to $6 billion.

China is pacing demand for new equipment with a projected market increase of 78 percent. Taiwan, at 22 percent, and North America, at 21 percent are also key growth areas, according to SEMI.

Myers said while capital spending, averaging about 15 percent now, will level off at 14 percent through 2009, but that is due to more efficient use of equipment as well as the continuing move to 300mm wafers. The move to 65nm processes and newer materials will also drive growth, though Myers expressed concern over possible shortages of polysilicon.

Last week, Gartner Inc. raised its 2006 global semiconductor capital equipment spending forecast, projecting $42.3 billion in 2006. However, Gartner predicted spending to decline 4.5 percent in 2007 to $40.4 billion, due to slower device production growth.

A rosier forecast was issued earlier by Strategic Marketing Associates, which projected demand for semiconductor production equipment and materials to jump 19 percent in 2006 and another 10 percent to reach $40 billion in 2007.

- Spencer Chin
EE Times

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