Companies to spend less on semiconductor manufacturing equipment in 2013

A softening in the premium mobile device market slows short-term growth, but new research predicts the market will pick up in 2014

New research from industry analyst Gartner, Inc. predicts an 8.5% decline in worldwide semiconductor manufacturing equipment spending this year, as global sales shrink to $35 billion from nearly $38 billion in 2012. The firm also expects capital spending—the total amount the industry spends for equipment and new facilities—among semiconductor equipment manufacturers to fall nearly 7%, due to diminishing investments in 28-nanometer chips from a softening mobile phone market.

The overall effect is due to slow conditions early in the year, however, and Gartner predicts a return to growth over the next three years.

“Weak semiconductor market conditions that continued into the first quarter of 2013 generated downward pressure on new equipment purchases," said Dean Freeman, Gartner’s research vice president. "However, semiconductor equipment quarterly revenue is beginning to improve, and positive movement in the book-to-bill ratio indicated that spending for equipment will pick up in the remainder of 2013. Looking beyond 2013, we expect that the current economic malaise will have worked its way through the industry, and spending will follow a generally increasing pattern in all sectors throughout the rest of the forecast period." 

Gartner predicts that 2014 semiconductor capital spending will increase 14%, followed by 13.8 percent growth in 2015. The next cyclical decline will be a mild drop of 2.8 percent in 2016, followed by a return to growth in 2017.

 

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