News Article
Semiconductor Equipment Revenues To Plummet 10.3 Percent
Severe macroeconomic factors that will prove to undermine the growth of the semiconductor industry in 2012 will also negatively impact semiconductor equipment sales.
This is according to the report "The Global Market for Equipment and Materials for IC Manufacturing", recently published by The Information Network.
To date, semiconductor revenues are down 16.1 percent year-on-year through July of 2011 and 2012, as shown in the graph above, based on billings data compiled by the association SEMI (Semiconductor Equipment and Materials International). This follows a wafer fab equipment market that saw spending increase by 13.3% in 2011.
"In light of the severe drop in billings from August through November 2011 according to the chart above, one could make the case that equipment manufacturers could make up some ground in the remainder of 2012, minimising the damage for all of 2012," noted Dr. Robert N. Castellano, president of The Information Network. "In fact, SEMI's May 2012 forecast for wafer fab equipment called for 2 percent growth in 2012."
VLSI Research recently raised its fab tool forecast in 2012, from minus 7.2 percent to minus 4 percent.
Gartner forecasts the market to total $33 billion in 2012, which would register a 8.9 percent decline from 2011 spending.
Applied Materials recently announced that it believes spending will be in the range of $30 billion to $33 billion for the year. Since total semiconductor manufacturing equipment billings were $33.4 billion in 2011. That would equate to being flat for 2012 to decreasing 10.2 percent.
"The forecasts are highly uncertain, ranging from flat to minus 10.2 percent. The key determinant is the shape of the curve for 2012, i.e., whether it increases to intersect the 2011 line or whether it continues to decrease," added Dr. Castellano.
The Information Network's Proprietary Leading Indicators (PLIs) correlated with semiconductor equipment have dropped with an inflection three months ahead of SEMI data. These PLIs, are designed to predict future changes in the direction of the economy, and suggest we should see at least another 3 months of downtrend in semiconductor equipment.
Having said that, The Information Network forecasts that 2012 should come in at $33 billion, a negative 10.3 percent, and near to Applied Materials' low-end projection.
