Semi equipment spending drops due to oversupply

Buying less chipmaking equipment could tighten supply next year

By Jim Carbone -- Purchasing, 7/16/2008 10:55:00 AM

Worldwide capital spending for semiconductor equipment will drop 22.4% to $49.2 billion in 2008 because of continued economic uncertainty and weakness in the memory integrated circuit market.

Researcher Gartner Inc. says significant oversupply conditions in the dynamic random access memory (DRAM) and NAND flash memory segments has led to price declines and profitability pressures for most of the memory chip manufacturers. As a result, many IC makers are cutting back on capital spending for equipment. “The next six to 12 months will be another period of uncertainty and risks for the semiconductor manufacturing and equipment industries,” says Klaus Rinnen, managing vice president for Gartner's semiconductor manufacturing group.

Actually, all sectors of semiconductor capital equipment market spending are on pace for double-digit declines in 2008. Worldwide wafer fabrication equipment spending is likely to decline 21.5% in 2008. Lithography continues to be the strongest segment, with only a 12% decline expected. Deposition, etch and implant are the hardest-hit segments, with overall declines in the 25% range. Worldwide packaging and assembly equipment spending is forecast to decrease 15.2 percent in 2008.

Also see:  Chip R&D spending to reach $49.2 billion in 2008