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Gartner trims outlook on capital equipment spending

Posted: 23 Apr 2007 ?? ?Print Version ?Bookmark and Share

Keywords:capital equipment spending? wafer fab equipment? packaging assembly equipment?

Gartner Inc. lowered its capital equipment spending forecasts for 2007 and 2008 amid a seasonal lull in the IC industry.

Overall capital spending is projected to hit $55.2 billion in 2007, down 1.5 percent over 2006, according to Gartner. Capital spending is projected to grow 10.7 percent to $61.1 billion in 2008.

Worldwide semiconductor capital equipment spending is forecast to total $40.6 billion in 2007, a 3.2 percent decline from 2006. The market is expected to rebound in 2008, as spending is expected to reach $46.7 billion, a 14.9 percent increase.

This is below the previous forecast in December.

''Annual growth in device sales, anticipated at 6 percent, faces considerable downside risk because memory supply is overabundant, and CPU price competition continues,'' said Klaus Rinnen, managing VP for Gartner's semiconductor manufacturing and design research group, in a statement. ''2007 may still be a decent year for semiconductor equipment manufacturers aligned with memory, but those that serve the rest of the market will face a weaker market than last year.''

Wafer fab equipment (WFE) revenue is expected to decline 0.7 percent in 2007. As a percentage of spending, memory will remain strong and account for more than 45 percent of WFE. Memory spending is expected to slow in the second half of the year, while logic integrated device manufacturer (IDM) and foundry spending should accelerate into 2008.

After growing more than 18 percent in 2006, packaging and assembly equipment (PAE) market revenue is projected to decline 12.2 percent in 2007. Gartner projects a vibrant PAE market in 2008 with growth of 20.2 percent.

ATE sales will be slow for most of 2007; the ATE market is expected to decline 11.2 percent in 2007, according to the firm.

- Mark Lapedus
EE Times

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