Global semiconductor equipment spending forecast to grow 113% in 2010

However, Gartner warned that equipment vendors should prepare for slower growth heading into 2011, with global semiconductor capital equipment spending forecast to grow 6.6%. "The drive to new technology nodes will drive semiconductor equipment growth in 2010," said Klaus Rinnen, managing vice president at Gartner. "The demand for 40nm and 45nm devices is now ramping up, resulting in heavy foundry based capital spending. Investment at the 3x node by Intel, an increase in spending by nand memory producers, and the transition to the next generation ddr3 dram memory are the key investment growth drivers." According to Rinnen, there could be a slight slowing in orders as 2010 ends, and the industry focuses on macroeconomic conditions. "We expect capital equipment growth to continue through 2011, but at a reduced rate, as spending responds to slower growth in the semiconductor markets," Rinnen noted. Following the significant declines in 2009, Gartner expects all segments of the semiconductor capital equipment market to experience exceptionally strong growth in 2010. According to Gartner, the wafer fabrication equipment segment will increase 113.3% in 2010, followed by 7.2% growth in 2011. Gartner believes that strong global demand for semiconductors, along with underinvestment in 2008 and 2009, has led to pent-up demand for equipment, and overall utilisation rates will peak in the third quarter of 2010. It predicts that the market will then start a slow decline as more capacity comes on line and quarter-on-quarter demand will return to more-normal levels. Rinnn concluded: "For 2010, the semiconductor equipment industry will experience exceptionally strong growth, as we emerge from a very costly and deep recession. Given this exceptional growth, there is a possibility that the honeymoon could end in 2011, which may help to mitigate the boom/bust scenario typical of previous cycles. However, if capacity expansion continues unchecked, a more severe and premature down cycle could occur in 2013. How quickly memory producers react as the market softens and average selling prices decline will likely determine if the market can avoid the massive drops of recent years."