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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Sr K who wrote (89312)	10/27/2008 5:48:10 PM
From: Dan3	Respond to of 116555

Gartner cuts IC capex estimates for 2009 SAN FRANCISO — Market research firm Gartner Inc. said Wednesday (Oct. 8) it expects semiconductor industry capital spending to decline 25.7 percent in 2008 and another 12.8 percent in 2009 before recovering to grow 16.7 percent in 2010. Gartner is the latest market watcher to cuts its capital spending forecast amid a global economic slowdown and continuing overcapacity in the chip memory sector. "Capital spending is slowing across the board, with all segments seeing a decline in capital spending in 2008 and into 2009," wrote Gartner analysts in a report. "The oversupply in memory, combined with a slowing consumer market due to the uncertain economic picture, gives little hope for an upside until 2010." According to Bob Johnson, one of the Gartner analysts who created the forecast, the capex decline for 2008 will be the biggest for the chip industry since 2002, when capital expenditures declined 35 percent after shrinking by 30 percent in 2001. The chip industry's capital intensity has been reset from approximately 20 percent of revenue in the late 1990s and early 2000s to about 15 percent going forward, Gartner said. This reset will have a significant impact on semiconductor equipment companies' future profitability, according to the firm. The forecast calls for worldwide IC capital spending to be roughly $33.5 billion in 2008 and $30.5 billion in 2009. Capex will suffer a compound annual growth rate of negative 2.1 percent from 2007 through 2012, according to the forecast. The industry will not match 2007 capex of $44.7 billion through the end of the forecast period in 2012, Gartner said. Gartner originally predicted that IC capital spending would decline 19.8 percent in 2008. The firm in July revised the predicted decline to 22.4 percent. Revenue for the wafer fab equipment segment will decline 26.1 percent in 2008 and another 11.9 percent in 2009, according to Gartner's forecast. The firm expects the packaging and assembly equipment segment to decline 18 percent in 2008, but grow 1 percent in 2009. The automated test equipment segment will fall 26.7 percent in 2008, but grow 5 percent in 2009, according to the forecast. The semiconductor industry needs to prepare.... The rest is at: URL: eetimes.com