SAN FRANCISCO — Worldwide semiconductor equipment sales will be essentially flat this year before rebounding in 2017 according to SEMI's mid-year forecast.

The trade group forecasts the total semiconductor equipment market will grow 1% in 2016 to %36.9 billion, up from a 3% drop in 2015. The market will grow 11% in 2017 to $41.1 billion, SEMI added.

Equipment spending had a slow start in the beginning of the year and is expected to accelerate in the second half of the year. Spending growth will continue into 2017 driven by foundries, memory (both 3D NAND and DRAM), MPU, Power, and investments in China. Front-end wafer processing equipment is forecast to grow 2% in 2016 to total $29.3 billion, up from $28.8 billion in 2015. The Test equipment segment is expected to total $3.4 billion, essentially flat when compared to last year. Assembly and packaging equipment and Other Front End equipment are forecast to contract this year, falling to $2.4 billion (-5%) and $1.9 billion (-2%), respectively.

Taiwan is forecast to continue as the world’s largest spender with $9.5 billion estimated for 2016 and $10 billion for 2017. In 2016, China is projected to be the second largest spender at $6.4 billion, followed by Korea at $6.2 billion. For 2017, Taiwan is projected to maintain its leading position while the market in Korea will nudge past the market in China.

In 2016, year-over-year increases are expected to be largest for rest of world (59%), China (31%), and Europe (6%). Projected year-over-year percentage increases for 2017 are forecast to be largest for Korea (30% increase), Europe (19%), rest of world (18%) and China (13%).