This year will see the biggest decline in spending on semiconductor manufacturing equipment since the industry's trade body, SEMI, started collecting market data 18 years ago.
SEMI expects the decline in equipment spending in 2009 to be 46%. That follows a decline of 31% in 2008.
"Worldwide semiconductor manufacturing equipment sales have declined to the lowest annual levels since 1994 as the global economic crisis and industry downturn caused the world's chip makers to significantly curtail spending and expansion," says Stan Myers, president and CEO of SEMI, "there has been recent improvement in equipment bookings and we anticipate a significant growth off the bottom with expectations of double-digit growth in the next two years."
Regionally, the biggest decline in equipment spending was in Japan which saw a 68% decline. That was followed by a 58.9% decline in Europe, a 44% decline in China, a 40.8% decline in the US, a 39.8% decline in Korea, and a 19.4% decline in Taiwan.
Next year, SEMI expects the market to grow approximately 53% to $24.5bn, up from $16bn this year, and to further increase about 2% in 2011 to $31.2bn.
Wafer processing equipment, the largest product segment by dollar value, is expected to decline by about 46% in 2009 to about $12bn. The wafer processing equipment market will rebound 54% in 2010 and 28% in 2011 to reach $23.6bn.
The market for assembly and packaging equipment will decline by 33% to $1.4bn in 2009 and will grow in the successive two years to reach $2.4bn in 2011.
The market for equipment to test semiconductors is expected to decline in 2009 by about 55% percent to $1.6bn in 2009 and will also grow in the successive two years to reach $3.3bn in 2011.
Significant contraction in 2009 was experienced in all market regions worldwide. Improved spending by NAND flash makers, foundries and packaging subcontractors are expected to be key growth drivers in 2010.
Regionally, the biggest decline in equipment spending was in Japan which saw a 68% decline. That was followed by a 58.9% decline in Europe, a 44% decline in China, a 40.8% decline in the US, a 39.8% decline in Korea, and a 19.4% decline in Taiwan.
See also: Mannerisms, the blog of David Manners. Updated twice daily, it's the distinctive, entertaining, authoritative and never dull commentary on the semiconductor industry, from someone who knows. Sign up for the Mannerisms eNewsletter.