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To: niek who wrote (1131)6/12/2006 9:18:01 AM
From: niek  Read Replies (2) of 43243
 
Gartner concerned over significant rise in semiconductor capital spending

Monday, 12 June 2006
FabTech

Gartner has raised its semiconductor capital spending forecast for 2006 by a considerable amount on the back of continued strategic spending by memory chip manufacturers and new plans announced by Japanese chip manufacturers as they start a new financial year in May.

According to Gartner's weekly newsletter to clients, the research firm estimates that CapEx has currently reached $55.5 billion US dollars this year resulting in a rise over 2005 of 17 percent. This is up on its previous revision of $38.8 billion US dollars and 14.3 percent growth.

However, Gartner is now projecting that CapEx will grow by a significant 25 percent in 2006, around 15 percent higher than overall semiconductor growth expected this year.

The research firm is now projecting a possible CapEx peak to occur in 1Q07 followed by many quarters of negative CapEx growth, resulting in negative figures for 2007. Previously the research firm was projection gradual sequential growth in spending through 2008.

Concern is being centralised around DRAM over-spending resulting in significant new production coming on stream in late 2006, early 2007 that could create a period of over-capacity should DRAM demand not keep pace with production increases. If that scenario should occur wafer fab equipment (WFE) orders will likely peak in 3Q06, and order delays could occur before year-end, causing 4Q06 to soften, concluded Gartner analyst, Klaus-Dieter Rinnen.
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