Semiconductor spending set to fall

Gartner predicts recession will force manufacturers to slash spending

Supply-side issues and the recession will force semiconductor manufacturers to slash capital spending even more than last year, Gartner warns.

The research house forecasts that worldwide semiconductor capital equipment spending in 2009 will plunge by 31.7 per cent. That is an even greater fall than in 2008, when capital equipment spending was predicted to have fallen by 30.6 per cent.

Klaus Rinnen, managing vice president of Gartner’s semiconductor manufacturing group, said: “The recession has come at a time when the overall semiconductor and semiconductor equipment industries were already in a vulnerable position.

“Device makers across all segments, and even in the Nand and DRam industry, have taken steps to lower production rates and shutter fabs that are not cost effective. Weare seeing fabs postponed, and what little capital expenditure there is, is focused on new technologies.”

Lithography was among the strongest segments in 2008, with revenue expected to fall just 22 per cent. Gartner attributed this to 193 immersion taking share from older technologies.

But even this market will collapse in 2009, Gartner warned, as memory manufactures slow the adoption of new immersion steppers and continue to work with older models.

Global packaging and assembly kit spending will fall 30 per cent in 2008 and 2009, the analyst added.

Meanwhile, after declining by nearly 30 per cent last year, the automated test equipment market is expected to fall 20 per cent in 2009.