Worldwide semicon spending to grow 76 p.c in 2010

 MUMBAI: Worldwide semiconductor capital equipment spending is projected to surpass $29.4 billion in 2010, a 76.1 percent increase from 2009 spending of $16.7 billion, according to Gartner, Inc.

"The dramatic semiconductor industry recovery rate over the last three quarters has necessitated a renewed growth for equipment spending," said Jim Walker, research vice president at Gartner.

He added that spending by the memory and foundry markets, along with the advancement to new technology nodes, will drive the semiconductor equipment segment in the first half of 2010. Quarterly growth would see a slight slowdown in the second half before capacity additions start ramping up the equipment industry again going into 2011.

Overall worldwide wafer fab equipment (WFE) spending declined 46.4 percent in 2009, a slight improvement from the 4Q09 forecast. Worldwide WFE spending in 2010 will grow 76.6 percent from 2009.

WFE spending would be driven by aggressive technology upgrades, especially for the leading memory companies. Utilization rates continue to run in the mid-80s to high 80s for total utilization and in the low 90s for leading edge. Leading-edge utilization will hit the mid-90-percent range by the end of 2010, which will start to drive stronger capacity additions in 2011.

"The semiconductor equipment industry will experience a very strong growth spurt in 2010, as we emerge from a very costly recession, and this growth is expected to continue throughout 2012," said Walker.

He added that however, they expect this upturn to be one of the first in which the peak revenue in capital equipment does not surpass previous growth cycles, which may well help to mitigate the boom/bust scenario that we have seen in the past.