Two major trends guide semiconductor spending

International research and consulting firm Gartner released the latest outlook report, in 2010 the global semiconductor capital equipment expenditure reached 38.4 billion US dollars, a sharp increase of 131.2% compared with 2009's 16.6 billion US dollars; at the same time estimated that the global semiconductor capital equipment expenditure in 2011 was 38 billion US dollars, In 2010, it declined slightly by 1%.

Klaus Rinnen, Gartner's vice president, said: “2010 will be the strongest year for the growth of the semiconductor equipment industry. It will rebound significantly in 2009 compared with the bad economy.” However, companies should prepare for 2011 with a more modest growth. Because equipment procurement will pay more attention to capacity increase rather than technical equipment.

Rinnen further analyzed: “The two major trends will guide future capital expenditures. The first trend is that NAND flash memory has become the main source of capital expenditure for the memory sector. Driven by the success of sales of media tablets, the demand for NAND is foreseeable. The future will remain strong, and must continue to invest heavily to meet the demand for increased demand.The other trend is that the foundry industry because of TSMC, GLOBALFOUNDRIES and Samsung (Samsung) in the fierce competition in cutting-edge technology, the spending needs, and Consolidate IDMs' continued asset reduction strategy, driving capital expenditures.”

All sectors of the semiconductor capital equipment market performed exceptionally strong growth in 2010, with annual growth rates ranging from 118% to 140% (see table below). In the wafer fab (WFE) market, global spending on this market steadily increased to $29.7 billion in 2010, a 133% increase over 2009. The strong global demand for semiconductors, coupled with underinvestment in 2008 and 2009, led to the release of previously suppressed equipment demand due to the rebound of the economy. However, as more production capacity and semiconductor production slowed down with end-user product demand, overall capacity utilization has been slowly declining. Gartner predicts that the wafer fab equipment market will shrink by 3.4% in 2011 and is expected to recover positive growth in 2012.

In 2010, the spending of the global packaging equipment (PAE) sector was estimated at more than $5.9 billion, an increase of 118.6% over 2009. At the same time, it is expected that expenditures for the packaging equipment sector in 2011 will grow by 7%. Looking further at the regional markets, the procurement of packaging equipment in the Asia Pacific region will account for 79% of the overall market in 2010. By 2014, this proportion will increase to 86%. In 2013, China will become the largest buyer of packaging equipment, and will account for more than 30% of the overall market share.

In 2010, the global automatic test equipment (ATE) market is expected to reach US$2.8 billion, which is a significant increase of 140.5% compared to 2009. This market has grown steadily in the first three quarters of this year, but it will have a seasonal recession at the end of 2010 and will continue into early 2011. One of the main reasons for the rapid growth of the automated test equipment market in 2010 was that this market sentiment bottomed out in 2009, when the memory test equipment market even declined to less than $200 million.