Despite the Gloom, Taiwan to See a Big Turnaround in 2009
By Lara Chamness, senior analyst, SEMI Industry Research & Statistics
It has been a challenging year for all involved in the semiconductor equipment market. Taiwan is not immune to the current situation. For the past two years, the region made significant investments in new equipment with 2007 equipment expenditures exceeding Japan’s by $1.3 billion. This year, it is expected that Japan will retake the lead with a spending of $7.88 billion.
In fact, Taiwan is expected to experience the largest decline this year with a forecasted contraction of 37% this year, attributed to spending cutbacks in the memory sector, placing the region second behind Japan. Capital spending by large test and assembly companies headquartered in Taiwan look to remain relatively flat compared to 2007 spending levels.
However, Taiwan will experience the strongest rebound in 2009 when compared to other regions. It is projected this region will grow 53% from $6.75 billion to $10.32 billion in 2009. This will allow Taiwan to reclaim the dominant new equipment market position.
Source: SEMI Equipment Market Data Subscription, July 2008
In comparison, the worldwide semiconductor equipment market is expected to total $34.1 billion, or contract 20% in 2008, then rebound 13% and 6% in 2009 and 2010, respectively. If this forecast bears out, spending levels in 2010 are projected to be $41.0 billion.
The semiconductor materials market is in better shape than the equipment sector, with a 9% overall growth expected this year. The market in Taiwan is forecasted to reach $8.7 billion this year and onward to $9.3 billion in 2009. This positions Taiwan second to Japan, which remains the dominate player.
Taiwan possesses enormous potential for a quick turnaround as one of the vital regions for the semiconductor industry. Given the tremendous amount of uncertainty in the market, the region will need to continue cautiously investing in the semiconductor equipment and materials markets in order to maintain its device manufacturing importance.
Portions of this article were derived from the Equipment Market Data Subscription (EMDS) and the Material Market Data Subscription (MMDS). These reports are essential business tools for any company keeping track of the semiconductor equipment and material market in Taiwan and the other regions. Additional information regarding this report and other market research reports can be found at www.semi.org/marketinfo.