Gartner sees 20 p.c drop in IC capex in 2012

SAN FRANCISCO, USA: Market research firm Gartner Inc recently forecasted that global semiconductor capital spending would decline by 19.5 per cent from this year's projected total, largely due to the slowing macroeconomic environment.

Gartner projects that capex will fall to $51.7 billion in 2012 from a projected $64.2 billion this year. The capex for 2011 represents 13.7 per cent growth over 2010.

"Natural disasters and the economy have certainly impacted the semiconductor capital equipment market in 2011, but we expect equipment spending to increase 13.7 percent in 2011," said Klaus Rinnen, managing vice president at Gartner, in a statement.

He added that however, equipment providers will not be as lucky in 2012. The impact of the slowing macro economy, high inventories and a sluggish PC industry – due to both weak demand and the flooding in Thailand – will temper the outlook for 2012.

Gartner expects the slowdown to last through the second quarter of 2012. By that time, the supply and demand should be in balance with the semiconductor side possibly even beginning to see some undersupply.

Gartner said it expects spending on capital equipment–including wafer fab equipment (WFE), packaging/assembly equipment and automated test equipment (ATE)–to fall to $34 billion in 2012, down 21.3 percent from a projected $43.2 billion in 2011. 

The equipment spending forecast differs from one issued last week by fab tool vendor trade group SEMI. The SEMI forecast calls for capital equipment to grow 4.7 per cent this year to $41.8 billion, then decline 10.8 per cent in 2012 to 37.3 billion.

The latest Gartner semiconductor capital expenditure forecast is slightly revised from one issued by the firm in September, when it projected that total capex would decline 16.7 per cent in 2012.