News Article
Equipment sales forecast to fall 15% in 2005
Global sales of semiconductor equipment will fall by 15% in 2005 following a 61% rise in 2004, according to market analyst Gartner.
The packaging and assembly equipment market will be hit particularly hard, revenues plummeting by 22% over 2005 to $3.5 billion. The only major segment of the semiconductor equipment market that will grow in 2005 is automated test equipment.
But even for this sector the outlook is far from rosy, with 3% growth in 2005 to be followed by a 30% slump in 2006.
Klaus Rinnen, vice president for Gartner's semiconductor manufacturing and design research group, said that excess inventories, macroeconomic uncertainty and slowing enduser demand would "cast a shadow" over 2005.
"Device production has slowed in recent months, and with it semiconductor manufacturers have readjusted their capacity ramp-up and equipment purchase plans."
Rinnen does not, however, believe that the downturn will be as intense or prolonged as previous slumps.
"Given more modest capacity investments during the cycle, the supply-demand imbalance will be far less severe than in the prior two. The approaching downcycle will be mild."
He is therefore predicting a return to positive annual investment growth "possibly" as early as 2006.
Gartner has also reported that worldwide semiconductor wafer fab utilisation rates peaked in the second quarter of 2004 at 94.9% before dropping to 91.3% at the end of the third quarter, as semiconductor manufacturers trimmed production levels in response to excess inventories.
"By the middle of 2004, capacity caught up with demand, and excess capacity started to emerge," said Rinnen. "However, any excess capacity during this down period will be considerably less than in prior downward cycles, and utilisation rates will decline only to about 85 percent before starting a gradual increase through 2006."
The packaging and assembly equipment market will be hit particularly hard, revenues plummeting by 22% over 2005 to $3.5 billion. The only major segment of the semiconductor equipment market that will grow in 2005 is automated test equipment.
But even for this sector the outlook is far from rosy, with 3% growth in 2005 to be followed by a 30% slump in 2006.
Klaus Rinnen, vice president for Gartner's semiconductor manufacturing and design research group, said that excess inventories, macroeconomic uncertainty and slowing enduser demand would "cast a shadow" over 2005.
"Device production has slowed in recent months, and with it semiconductor manufacturers have readjusted their capacity ramp-up and equipment purchase plans."
Rinnen does not, however, believe that the downturn will be as intense or prolonged as previous slumps.
"Given more modest capacity investments during the cycle, the supply-demand imbalance will be far less severe than in the prior two. The approaching downcycle will be mild."
He is therefore predicting a return to positive annual investment growth "possibly" as early as 2006.
Gartner has also reported that worldwide semiconductor wafer fab utilisation rates peaked in the second quarter of 2004 at 94.9% before dropping to 91.3% at the end of the third quarter, as semiconductor manufacturers trimmed production levels in response to excess inventories.
"By the middle of 2004, capacity caught up with demand, and excess capacity started to emerge," said Rinnen. "However, any excess capacity during this down period will be considerably less than in prior downward cycles, and utilisation rates will decline only to about 85 percent before starting a gradual increase through 2006."
