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Japan chip equipment sales seen down 7%

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CIOL Bureau
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TOKYO: Sales of Japan-made semiconductor production equipment, including

exports, are forecast to fall 6.9 per cent in the business year from April 1,

extending this year's expected 53.9 per cent drop, an industry group said on

Monday.

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The Semiconductor Equipment Association of Japan (SEAJ) projected 2002/03

sales of Japanese chipmaking equipment at 775.4 billion yen ($5.85 billion),

down from an estimate for the current financial year of 823.4 billion yen.

"Although the semiconductor market is expected to shift into a recovery

mode in 2002/03, with the move to broadband in communications and PC-related

equipment and growth in next-generation mobile phones, there is a time lag for

capital investment in semiconductors," the SEAJ said.

For the longer term, the association forecast sharp increases of 33.5 per

cent in 2003/04 and 24.7 per cent in 2004/05, reflecting a switch in chipmakers'

investments to larger silicon wafers, narrower design rules and copper

interconnects to replace aluminium.

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Chip equipment orders by Japanese users, including imported equipment, were

projected to fall 12.2 per cent in 2002/03 to 474.8 billion yen, after this

year's forecast of a 46.7 per cent fall to 540.8 billion yen.

The association said, however, that if Japanese chipmakers delayed investment

in new equipment while foreign rivals were implementing strategies that

anticipate the next upturn, they may find their foundation weakened and their

markets infiltrated by South Korean, Taiwanese, and eventually Chinese

manufacturers.

This year's decline in equipment to make liquid crystal displays (LCDs) was

less pronounced, the association said, reflecting better-than-expected demand

for flat PC monitors and investment in new technologies such as low-temperature

polysilicon.

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