SEMI Doesn’t See Positive Equipment Sector Growth Until 2003
By Jeff Chappell, Electronic News
Apr 25, 2001 --- MUNICH, Germany – Even though there is initial evidence that chip inventories are beginning to drop, it may be some time, perhaps not even until late 2002 or early 2003, before the equipment industry returns to positive, double-digit growth.
That was the conclusion of Elizabeth Schumann, director of industry research and statistics for Semiconductor Equipment and Materials International (SEMI), who delivered an equipment and materials market briefing here today at SEMI’s Semicon Europa tradeshow.
“Even when the (chip) demand problem corrects itself late in the year, we will still have a supply problem,” Schumann said of the demand for capital equipment.
Part of the problem is that, while the semiconductor industry cycles, the corresponding equipment industry cycles tend to be more extreme. While growth rates in chip sales quadrupled in 2000, equipment sales growth rates grew more than five times faster than they did the previous year. Schumann presented SEMI statistics that show that phenomenal growth like the industry experienced last year has never been sustained for more than one year at a time.
Furthermore, analysts are predicting little, or in some cases flat or negative growth in semiconductor markets this year, and that will mean flat growth, at best, for SEMI’s member companies. In fact, SEMI forecasts tool sales to remain flat at $47 billion this year and next, before rising to $54 billion in 2003 and $65 billion in 2004.
In the history of the semiconductor industry, there have only been two years of flat growth, the last being in 1998, and only one year of negative growth. Schumann said SEMI isn’t expecting negative growth in chip sales this year.
“Right now, we’re expecting about 5 to 10 percent growth for the year, but we’re going to have to watch that,” she said. “The latest data show (chip) inventories are coming down … but demand is kind of flat right now.”
Another part of the dismal equation for tool suppliers is that, even as chipmakers cut capital spending this year, there is still de facto chip making capacity being added within the industry, Schumann explained. For example, companies are going ahead with 300mm fab plans that have already been in the works, even as 200mm plans are being pushed out or canceled.
Thus even if demand picks up in end markets later this year, it is going to take time to filter down to toolmakers’ bottom lines.
Link: electronicnews.com
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