fyi.....buy on FUD ................
Chip Equipment Spending Remains Big
Question
( 1/07/98; 10:18 a.m. EST)
By J. Robert Lineback, Semiconductor Business News
Suppliers of semiconductor production equipment and
materials appear to be bracing themselves for slow
growth in 1998 while the chip industry attempts to sort
out the impact of Asia's economic woes. An informal
poll of executives attending the Industry Strategy
Symposium in Pebble Beach, Calif., this week showed
most were now expecting a flat year.
But industry analysts presenting new forecasts at the
annual meeting varied greatly in their outlooks for
1998. For example, Dataquest analyst Clark J. Fuhs
said he predicted wafer fab equipment spending will
increase only 1.8 percent to $22.7 billion in 1998
compared with $22.3 billion in 1997, when the capital
equipment market grew 2.9 percent.
In contrast, Dan Hutcheson of VLSI Research painted
a highly optimistic picture, forecasting a 24.7 percent
increase in wafer fab equipment purchases in the next
12 months. Hutcheson said he expects wafer fab
equipment spending to reach $26.9 billion in 1998,
compared with $21.6 billion in 1997.
"The data indicates we are in an upturn cycle," said
Hutcheson, who said he believes pressures are
increasing on chip makers worldwide to complete the
migration to quarter-micron processes in 1998.
Meanwhile, Dataquest's Fuhs maintained that
stronger-than-expected demand for chip production
systems in 1997 "stole" growth from 1998. In
addition, weak demand for new wafer fabs in the Far
East will also depress capital spending this year,
according to Fuhs, who sees a 15.4 percent decrease
in Asian revenues for equipment suppliers in 1998.
"I'm not bearish on Asia. They will continue to spend
money [on new fab capacity], but the issue is when,"
Fuhs said. "Will it take six to nine months? We think it
will, and Asia will come back spending more money
on capacity in 1999 or 2000."
In South Korea, new capital spending has essentially
been "frozen," and when it does restart, European
projects will be given first priority, Fuhs said. Phase II
expansions in the United States will most likely receive
funding in 1999 after a delay, he added. In 1998,
Korean capital spending will be cut 40 percent, based
on U.S. dollar sales, Fuhs said.
In 1999, Asian spending on wafer fab equipment will
rebound with a 14.1 percent increase to $6.7 billion,
Fuhs said. In 2000, the region will increase it capital
spending on new fab capacity by 61.2 percent to
$10.8 billion, according to the new Dataquest
forecast. |
