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Gartner downgrades again IC capex

Posted: 19 Nov 2008 ?? ?Print Version ?Bookmark and Share

Keywords:forecast? semiconductor?

Market research group Gartner Inc. has reduced its projection for IC equipment manufacturing gear sales in 2009, just weeks after an earlier downgrade.

It said the revision follows a significant reduction in its expectations for the 2009 chip market.

The company forecast last month that semi industry capital spending would drop 25.7 percent this year and a further 12.8 percent in 2009.

It now suggested that next year's decline would be closer to 18 percent.

Other market researchers have also been cutting their forecasts for capex amid steep declines in demand and continuing overcapacity, notably in the memories sectors.

Earlier this month, Gartner also modified downwards its expectations for global semiconductor revenues and said for this year, it would be $279.4 billion, a 2-percent increase from 2007.

In its past forecast, the research firm projected that the IC industry would increase about 7.8 percent in 2009. Gartner now sees worldwide IC revenue in 2009 to total around $282 billion, a 1-percent increase from 2008 revenues.

It now says that even though its earlier capital equipment forecast, issued October 7, was already based on lowered semiconductor sales expectations, "the increased downside for 2009 sales and a number of downward revisions in 2009 capital spending budgets compel us to lower our capital and equipment spending expectations to the downside scenario (Alternative 2), stated in our most recent forecast.

"With that, we currently expect a capital spending decline of about 17 percent in 2009 and capital equipment to drop roughly 18 percent."

Capital spending expectations for 2009 are now reduced from $41.1 billion to $39 billion, while the total 2009 equipment spending forecast is now put at $26.8 billion, down from $30.5 billion.

The group claimed that in absolute terms, the industry's sales potential is sliding further, by $3.7 billion, from its October forecast, rolling sales back to the pre-2004 level. "We see a quarterly revenue bottom in mid-2009, at $6.3 billion, which is a level not seen since Q4 03."

- John Walko
EE Times Europe

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