Down year seen for fab-tool makers in '08
Worldwide semiconductor capital equipment spending is forecast to total $43.7 billion in 2007, a 4.1 percent increase from 2006. The market is expected to reach $43.8 billion in 2008, up a mere 0.3 percent.
he's been brain dead for some time...
to fully appreciate the headline I recommend to click on the table...that's all for today.
look at the net of the two forecasts; certain capex was pulled in - the net based on 2007/2008 is on the order of $1.4 billion or 1.6%.
Mark LaPedus
EE Times
(10/03/2007 12:46 PM EDT)
SAN JOSE, Calif. — There is bad news for suppliers of semiconductor equipment: 2008 appears to be a down year for the industry.
And so are we headed for a downturn? Amid a slowdown in the IC industry, Gartner Inc. Wednesday (Oct. 3) slightly raised its capital equipment spending forecast for 2007, but lowered it for 2008. (See table below)
Overall capital spending is projected to hit $57.1 billion in 2007, up a mere 1.5 percent over 2006, according to Gartner (Stanford, Conn.). Capital spending is projected to go into negative territory and fall by 4.4 percent to $54.6 billion in 2008, according to the research firm.
Worldwide semiconductor capital equipment spending is forecast to total $43.7 billion in 2007, a 4.1 percent increase from 2006. The market is expected to reach $43.8 billion in 2008, up a mere 0.3 percent.
The numbers are different than Gartner's last forecast in July. At that time, the firm said overall capital spending was projected to hit $56.6 billion in 2007, up a mere 0.6 percent over 2006. Capital spending was projected to grow 4.8 percent to $59.3 billion in 2008, according to the research firm.
In July, Gartner said worldwide semiconductor capital equipment spending was forecast to total $43.1 billion in 2007, a 2.7 percent increase from 2006. The market was expected to rebound in 2008, as spending is expected to reach $45.8 billion, a 6.2 percent increase.
"The last quarter of 2007 has arrived and with it, the harsh reality of an order slowdown that started in the first quarter of the year," according to a new report from Gartner. "Semiconductor Equipment and Materials International's (SEMI's) book-to-bill ratio has dropped to 0.83 for August because orders and billings have receded from their highs."
There is some positive news. "However, even with the bad news, 2007 has an upside. Firming average selling prices (ASPs) in the microprocessing unit (MPU) and memory segments have caused the semiconductor forecast to rise to 3.9 percent," according to the firm. Previously, Gartner's IC forecast was 2.5 percent in 2007.
"Memory demand has been driving new capacity, which is driving 300-millimeter equipment buys. This has fueled a 'hot' first half of the year that has trailed off into the third quarter," according to the firm. "As a result, we have slightly raised our 2007 capital spending and equipment forecasts for the year. Unfortunately, the upside for 2007 will impact 2008, and we now expect 2008 to move from slightly positive for capital expenditure and wafer fab equipment (WFE) to slightly negative. Our outlook for the back-end equipment markets remains positive; albeit, we foresee some slowing compared with the previous quarter's expectations."
There are several reasons for the slowing of the equipment market. "Memory investment budgets are largely spent, especially for DRAM, and with profits largely gone, there is no money to fund any increases," according to Gartner.
"MPU manufacturers in the midst of a pricing war have reduced capex for 2007, even with the ramping up of the 45-nanometer technology node. Foundries have not seen the demand pull for the leading-edge technologies; for example, 65-nm accounts for only about 3 percent of TSMC's revenue, and as a result, TSMC has shifted to less-expensive, mature technologies that are currently in high demand," according to Gartner.
"In 2008, Gartner forecasts DRAM capex to drop, with logic spending seeing further declines year over year. NAND flash capex is expected to rise as the new capacity additions are needed. Foundry spending will provide some relief, but the combination of NAND flash and foundry spending will not counterbalance the impact of slowing DRAM and logic integrated device manufacturer (IDM) spending," according to Gartner.
"However, Gartner still expects DRAM spending cuts to be limited as the transition to 300-mm is required since 200-mm fabs are not capable of cost-effectively manufacturing at or below 65-nm. Trends in DRAM pricing will play a key role in capex cuts in 2008," it said.
It's a mixed picture in the fab-tool segments. WFE segment's revenue will rise 6.4 percent in 2007, but will drop 1.3 percent in 2008, according to the firm. Revenue for the packaging and assembly equipment (PAE) segment will decline 3.4 percent in 2007 but grow 5.5 percent in 2008.
The automated test equipment (ATE) segment's revenue will decrease 4.8 percent in 2007 but grow 7.3 percent in 2008. Revenue for the semiconductor assembly and test services (SATS) market will increase 9.1 percent in 2007 and 11.7 percent in 2008.
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