Semicon manufacturing equipment spend drops 32pc

STAMFORD, USA: Worldwide semiconductor capital equipment spending totaled $30.7 billion in 2008, a 31.7 percent decline from the previous year, according to final results by Gartner, Inc. In major segments, wafer fab equipment declined 32.8 percent, while back-end equipment (BEE) decreased 27.2 percent, as both areas were hit hard by reductions in capital spending.

Analysts said that early in 2008, it was obvious that excessive memory spending in prior years had resulted in untenable financial conditions for memory suppliers. Then came the global economic meltdown in the third quarter, which caused most spending plans to be put on hold.

"As losses mounted in the memory sectors, memory capital spending plummeted," said Klaus Rinnen, managing vice president for Gartner's semiconductor manufacturing research group. "The combination of an oversupply-driven downturn in memory, followed by a demand crash across the whole industry, will make 2008 one of the worst years in the history of the semiconductor capital equipment industry."

In 2008, the top six companies remained the same as in 2007 (see Table 1). Applied Materials maintained the No. 1 position, accounting for 13.2 percent of the worldwide market, despite a 39.8 percent decline in revenue. ASML replaced Tokyo Electron as the No. 2 company. ASML's advance was made possible by strong demand for high-priced 193-nanometer (nm) deep ultraviolet (DUV) immersion steppers. Teradyne jumped into the top 10 and captured the No. 1 spot in the test markets.

Table 1

Top 10 Worldwide Semiconductor Manufacturing Equipment Vendors by Revenue Estimates (Millions of US $)



Note: Data includes revenue from acquisitions in 2008 for the entire year. 2007 data is before acquisitions. Growth is organic as well as through acquisitions.

Source: Gartner (April 2009)

In the wafer fab equipment (WFE) market, all segments declined in 2008, as WFE revenue decreased 32.8 percent in 2008 to total $24.2 billion. Buoyed by 193 nm DUV immersion demand, the main photolithography segments fared better than the market: Stepper sales declined 25 percent, and track tools dropped by 29 percent year over year.

The packaging assembly equipment (PAE) market totaled $4 billion in 2008, a 24.5 percent decline from 2007. More-traditional die-level packaging (DLP) equipment took the brunt of the decline, as interconnect and die bonder sales declined more than 30 percent. The advanced packaging lithography and wafer-level-packaging processing tools eked out growth in an overall strongly declining market environment.

In the automated test equipment segment, sales fell more than 31 percent in 2008, resulting in a total market size of $2.4 billion. The Asia/Pacific region remained the biggest consumers of test equipment at nearly 22 percent share as system-on-chip (SoC) test and radio frequency (RF)-related test remained strong. The memory test demand segment declined 60 percent in 2008. The bright spots were the SoC- and RF-test-related equipment markets.