Mid-Year Update for Semiconductor Equipment and Materials


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Mid-Year Update for Semiconductor Equipment and Materials

By Daniel Tracy, senior director, SEMI Industry Research & Statistics

As discussed in last month’s article (Companies Roar Again – Fab Spending Growth to Reach 117 Percent in 2010), the capital spending across the semiconductor industry undergoing a sharp upward recovery this year — off of deep lows reported in 2009. While conditions in some sectors of the global economy may be unsettled and obscuring the outlook for continued economic improvement, the semiconductor market has benefited so far from a robust demand for chips. How economic market conditions will unfold in the second half of 2010 and into 2011 are unclear; however, the expectation is for the semiconductor market recovery to continue.

Semiconductor equipment and materials data collected by SEMI confirms the breadth and strength of the recovery. Sales and orders are up for most segments of the equipment and materials markets: wafer processing, assembly & packaging, test, and related sub-segments.

Source: SEMI Industry Research and Statistics, July 2010

As one example of improving market conditions, first quarter orders for equipment were over five times higher compared to the same period one year ago. Total equipment billings for the first half of 2010 will be at least equal to, and even likely surpass, the total spending recorded for all of 2009. As a result, 2010 equipment spending is forecasted reach $32 billion, which is higher than the $29.5 billion spent in 2008.

As the above chart shows, the semiconductor materials segment of the industry is also experiencing remarkable growth. First quarter 2010 shipments reported for both silicon wafers and leadframes doubled compared to one year ago, and second quarter shipments (when the final data is in) will likely show improvement over the first quarter. With the strength in electronic sales and the steady rise in semiconductor unit production, the materials market will grow by at least 17 percent in 2010 (see chart below). Preliminary analysis forecasts growth continuing into 2011 as well with total revenues returning to previous market highs.

Source: SEMI Industry Research and Statistics, July 2010

For the latest update and information on the semiconductor market outlook, register for the SEMI/Gartner Market Symposium on July 12, 2010 at SEMICON West:

http://www.semiconwest.org/SessionsEvents/BusinessPrograms/ctr_035631

The SEMI Industry Research and Statistics group provides timely market and trend information for market research, competitive analysis, and sales forecasting. We focus on the global semiconductor capital equipment, selected materials markets and fab forecasting data. Please visit www.semi.org/marketinfo for additional information.

July 6, 2010