So much good news....all at once:
Chip-equipment market headed for 'recession' in 2001, says analyst
Semiconductor Business News
(12/01/00 11:40 a.m. PST)
SAN JOSE -- In yet another ominous sign for the semiconductor industry, the chip-equipment market is headed for a gradual slowdown in 2001--with a possible "recession" in the second half of next year, according to analysts at VLSI Research Inc. here.
In a new forecast, VLSI Research projects that the worldwide semiconductor equipment market will grow at a modest 9.9% rate next year, from $62.7 billion in 2000, to $68.9 billion in 2001.
Some semiconductor-equipment markets--including ion-implantation, lithography, and others--will remain robust in 2001, other analysts speculated. But others like back-end assembly and test gear could be in for a hard landing, they added.
Overall, the market looks bleak--at least in some sectors. "It's going to be a relatively weak year [for chip-equipment makers]," said Risto Puhakka, an analyst who tracks the industry for VLSI Research in San Jose. "We expect the market to de-accelerate next year--with a recession projected for the second half."
Puhakka blamed the conditions several on several factors, including what could be excess capacity in the silicon foundry arena in 2001. "There has been a massive build-up of manufacturing capacity, which will drive [chip] prices down," he said. "The memory guys have been conservative in terms of building new fabs, but the foundry guys have been quite aggressive."
The disclosure is the latest sign that the semiconductor--as well as the computer, communications, and related industries--are headed for a slowdown in 2001. Some analysts believe that some, if not all, of these markets will experience a hard landing.
And the anticipated boom for the Christmas season is quickly turning into a major bust. In recent times, several PC OEMs--including Gateway, Micron Electronics, and others--have issued warnings about their current quarters, citing weak demand in the market.
There is also some uncertainty in the communications space. Demand for telecommunications-equipment, cellular phones, and other products is slowing after a period of sizzling growth.
This, in turn, is having a ripple effect on chip makers. In recent days, Altera, Cypress, Fairchild, and Mosel Vitelic have separately issued warnings about their financial pictures in the fourth quarter, also citing lower-than-expect demand in the market.
And the chip-equipment makers could be next. In some equipment markets, however, demand continues to outstrip supply, especially in lithography.
Philip Ware, director and general manager of marketing for the Semiconductor Equipment Division at Canon U.S.A. Inc., in a recent interview said that the company is sold out of its lithography gear until 2002.
Another lithography tool supplier, ASM Lithography (ASML), also does not project a downturn in 2001. "It's the opposite," said Doug Marsh, vice president of U.S. technology development for ASM Lithography. "We project that ASML will grow 30% to 35% next year. We still have more demand for our machines than supply," Marsh said.
In July of 2000, ASM Lithography indicated that the requests for its machines were 30% more than what the company could deliver, Marsh said. "Now, the requests for our machines is 25% more than what we can deliver," he added.
Other segments remain robust, including ion-impanters. "We still see growth [in the ion-implanter market] in 2001 and 2002," said Babak Adibi, senior director and global product manager for the Implant Division at Applied Materials Inc. "In fact, the ion-implanter market has grown 200% in the last two years, but Applied has grown 300% in this market," he added. |
