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IC equipment spending to increase this year, Gartner says

Posted: 13 Jul 2007 ?? ?Print Version ?Bookmark and Share

Keywords:IC equipment spending? Gartner report? NAND?

Gartner Inc. forecasts that worldwide semiconductor capital equipment spending will amount to $43.1 billion in 2007, a 2.7 percent increase from 2006.

"A combination of factors, including residual semiconductor inventories in the first quarter and strong 2006 capacity investments, especially in memory, are leading to a slowdown in equipment demand throughout 2007," said Klaus Rinnen, managing VP for Gartner's semiconductor manufacturing group. "New equipment orders are receding as DRAM capital spending budgets are being exhausted and other segments are not increasing budgets to compensate."

For 2008, Gartner anticipates that DRAM spending will decline from this year's peak, and equipment market growth will originate from NAND, logic and foundry, which will drive a second year of slow single-digit growth. However, analysts are projecting strong DRAM unit demand in 2008 that should mitigate concerns of overcapacity and could provide upside potential for next year

Wafer fab equipment (WFE) revenue is on pace to grow 5 percent in 2007, which represents a significant slowdown from 2006 revenue growth of 25.7 percent. The 45nm technology node will begin to ramp up in 2007, but investments in 65nm and 90nm production are dominating the spending picture, Gartner said. As a percent of the spending, memory is expanding again, reaching more than 54 percent of total WFE. However, memory spending will likely slow in the second half of the year as budgets are exhausted, which will lead to a decline in WFE demand for the rest of the year.

Meanwhile, the packaging and assembly equipment market has improved since Gartner's forecast in April when it forecast a 12 percent decline in 2007. This was due to modest improvements in the spending for semiconductor assembly and test services companies.

Also, with a stronger-than-expected memory test sales to support DDR test, Gartner now projects revenue for the automated test equipment market to decline less than 5 percent this year. In 2008, a modest recovery with growth of slightly more than 10 percent is expected.




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