Industry Update and Seasonal Trends


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Industry Update and Seasonal Trends

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

The 2010 recovery has been a tremendous boon to semiconductor manufacturers and to equipment and material companies supplying advanced technologies needed to fabricate and package devices. 2010 chip sales and unit shipments are at record levels; capital spending has rebounded sharply; and the industry will once again expand its fab capacity base. New additions to installed fab capacity are likely to increase 7 percent for the year and through August, spending on semiconductor equipment is already more than 40 percent above the $15.9 billion spent for all of 2009. And four months remain for companies to report equipment sales, thus there are no doubts about it…a wildly strong growth rate will unfold for the year in the equipment market.

So what lies ahead for the remainder of this quarter and early 2011? The industry has tracked seasonal trends in the past and one can reasonably expect slowing in some segments during the fourth quarter and into the first part of 2011, especially given the breakneck growth rates experienced from the lows of 2009.

Just one data set highlighting this is shown in the chart below, which plots three-average monthly aggregate sales of four leading companies in Taiwan, from January 2003 through August 2010.

The aggregate sales historically show seasonal slowing that typically begins in the later part of a calendar year and continues into the first quarter of the New Year. This seasonal pattern has been quite consistent over the past eight years and is observable in other industry data as well, such as chip sales and both silicon and leadframe shipments. The SEMI North American Book-to-Bill data also show equipment orders tend to follow this seasonal pattern in most years as well.

As 2010 closes and the New Year approaches, semiconductor manufacturers will assess the economic outlook for 2011 and plan capital investment accordingly. Later in October, SEMI will issue a press release for the silicon wafer shipment outlook for 2011-2012 and in early December, SEMI will issue an update to its Consensus Forecast for semiconductor equipment. Stay tuned!

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. Also, visit www.semi.org/fabs for updates on fab investment plans and SEMI fab database offerings.

October 5, 2010