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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (11636)	10/6/2004 6:33:10 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

Gartner lowers capital spending forecasts for '05 By Mark LaPedus Silicon Strategies 10/06/2004, 5:22 PM ET SAN JOSE, Calif. — A pending IC downturn prompted Gartner Inc. on Wednesday (Oct. 6) to raise its capital spending forecasts for 2004, but to lower its predictions in 2005. Total capital spending has accelerated and is on pace to reach $45.7 billion in 2004, up 53.9 percent from $29.7 billion in 2003, according to Gartner. In 2005, overall capital spending is expected to hit $45.8 billion, up 0.4 percent over 2004, according to Gartner (Stamford, Conn.) Worldwide capital equipment spending is expected to hit $37.97 billion in 2004, up 66.3 percent in 2003, according to the research firm. But amid a possible downward cycle in 2005, capital equipment spending is projected to decline 0.6 percent next year, according to the firm. The projections are slightly different than previous forecasts. In July, the firm projected that total capital spending would grow 50.9 percent in 2004 and 13.4 percent in 2005. It also said that worldwide capital equipment spending would grow 63.5 percent in 2004 and 15 percent in 2005 (see July 8 story). Meanwhile, worldwide semiconductor wafer fab utilization reached 94.8 percent at the end of the second quarter of 2004, up from 93.2 percent at the end of the first quarter. An excess inventory burn that began in the third quarter broke the advance of utilization rates, leading to a first but small decline to 94.7 percent. "We expect a downcycle in 2005 driven by supply and demand issues," said Klaus Rinnen, vice president for Gartner's semiconductor manufacturing and design research group, in a statement. "We do not expect a semiconductor device unit contraction, but rather a slowing in the pace of expansion, which, combined with new capacity additions, would lead to a supply-demand imbalance," he said. "Utilization rates should drop below the 90 percent level in the seasonally weak first quarter of 2005," he said. "While seasonal demand growth in the second and third quarters will buffer the impact of capacity in motion, rates will decline in late 2005 and bottom out in the first quarter of 2006 in the low 80 percent range for all production before beginning to climb again." While there are concerns for 2005, 2004 is turning out to be one of the best years for fab equipment. Wafer fab equipment revenue is on pace to rise 72 percent, while packaging and assembly equipment revenue will grow 49 percent. Automated test equipment (ATE) revenue will increase by 52 percent in 2004.