WFE revenue is forecast to grow 6.4 percent in 2007. The 45-nanometer (nm) technology node is beginning to ramp up in 2007 as Intel starts initial production and as foundries make this level of technology available to their customers. However, investments in 65-nm and 90-nm production dominate the spending picture, as does equipment for DRAM and NAND flash, which will account for more than half of the total spending for new equipment. Memory-related spending will continue to dominate equipment demand and define market directions in 2008.

After growing more than 18 percent in 2006, packaging and assembly equipment (PAE) market revenue will decline about 3.5 percent in 2007. On a regional basis, Asia/Pacific will continue to increase its share of PAE consumption. From about 66 percent of PAE shipments in 2006, Asia/Pacific will account for almost 77 percent of all PAE sales early in the next decade.
Automated test equipment (ATE) market growth was slightly less than 10 percent in 2006. In 2007, Gartner analysts expect a modest decline because the ATE market improved throughout the first half of the year. Given relatively strong memory test sales to support double data rate test, and some improvements in system-on-chip (SoC) test sales, Gartner projects revenue for the ATE market to decline 4.8 percent this year. In 2008, a modest recovery with growth of slightly more than 7 percent is expected