STAMFORD, CT, Dec. 16, 2004 —
Worldwide semiconductor capital equipment spending is on pace to grow
61% in 2004, but next year's spending is projected to drop 15,
according to Gartner Inc.
"The
emergence of excess inventories, macroeconomic uncertainty and slowing
end-user demand casts a shadow over the outlook for 2005," said Klaus
Rinnen, vice president for Gartner's semiconductor manufacturing and
design research group. "Device production has slowed in recent months,
and with it semiconductor manufacturers have readjusted their capacity
ramp-up and equipment purchase plans."
All major segments of the
capital equipment market are forecast to decline in 2005 except for the
automated test equipment market, which is expected to grow 3%, followed
by a 30% drop in 2006. Gartner analysts said the industry is in a
downcycle, but this period will be shorter than the prior one in 2001.
"Given more modest-capacity
investments during the cycle, the supply-demand imbalance will be far
less severe than in the prior two cycles," Rinnen said. "Consequently,
the approaching downcycle will be mild, allowing for a return to
positive annual investment growth possibly as early as 2006."
Worldwide semiconductor wafer
fab utilization rates peaked in the second quarter at 94.9% before
dropping to 91.3% at the end of the third quarter, as semiconductor
manufacturers trimmed production levels in response to excess
inventories.
"By the middle of 2004,
capacity caught up with demand, and excess capacity started to emerge,"
Rinnen said. "However, any excess capacity during this down period will
be considerably less than in prior downward cycles, and utilization
rates will decline only to about 85% before starting a gradual increase
through 2006."
The packaging and assembly
equipment market will fall 22% in 2005, to about $3.5 billion. Growth
will be limited to packaging lithography and flip-chip bonder tooling.
Packaging utilization rates will likely bottom out in the second half
of 2005, giving way to a pickup in orders by the end of the year or
very early in 2006.
Gartner analysts said the
automated test equipment market will experience a slight increase due
to the continued growth of test outsourcing, and the remaining strength
of semiconductor assembly and test services providers.
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