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Monday, 01 October 2012 10:07

Fab equipment spending declining

Written by Nick Farrell

y wafer

Will not improve for a couple of years

Gartner has warned that worldwide wafer fab equipment (WFE) spending is on pace to total $31.4 billion in 2012, a decline of 13.3 percent from 2011 spending of $36.2 billion.

Big G warns that while the market will improve in 2013, it will not return to positive growth, with WFE spending projected to total $31.2 billion, a 0.8 percent decline from 2012. Things will not get better until 2014 and when the market returns to growth, as it is projected to increase 15.3 percent to surpass $35.9 billion.

Bob Johnson, research vice president at Gartner said that the outlook for semiconductor equipment markets has deteriorated as the macro economy has weakened. "WFE started off the year strong, as foundries and other logic manufacturers ramped up sub-30-nm (nanometer) production.

However, demand for new equipment logic production will soften as yields improve, leading to declining shipment volumes for the rest of the year," Johnson said. Wafer fab manufacturing capacity use will decline into the low 80 percent range by the end of 2012 before slowly increasing to about 87 percent by the end of 2013, he added.

Johnson said that although a period of inventory correction, which led to lowered production levels, appears to be over, overall market weakness is continuing to depress use level. "Increased demand, combined with less than mature yields at the leading edge, is creating shortages at the leading edge for logic, but that is not enough to bring total utilization levels up to desired levels. In the memory segment, some suppliers are even cutting production in an attempt to shore up weak market fundamentals," he said.

Memory sales will continue to be weak through 2012, with strong declines in DRAM investments and a virtually flat NAND market.


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