“Weak market conditions in the second half of 2011 caused pullbacks in expansion plans throughout the semiconductor manufacturing industry,” said Klaus Rinnen, managing vice president at Gartner. “This investment weakness will continue through the first half of 2012 and will surge in the second half of the year. We’re basing these assumptions on the aggressive spending plans announced by the major semiconductor manufacturers. There is a risk that some capacity expansion plans will slip from the second half of 2012 into 2013.”
“Downward pressure on utilisation rates is easing, with the result that utilisations will begin to climb upwards again in the second quarter of 2012,” Mr Rinnen said. “Once the supply is balanced, DRAM and foundry manufacturers will need to begin to increase spending to meet an increase in demand, as the PC market rebounds and consumers begin spending as the economy stabilises.”
Gartner analysts said worldwide semiconductor manufacturing equipment spending will return to double-digit growth in 2013 when spending is projected to total $43 billion, a 10.5 per cent increase from 2012. Worldwide semiconductor capital spending is forecast to total $60.9 billion in 2012, down 7.3 per cent from 2011 spending of $65.8 billion in 2011. Capital spending is expected to grow 3.5 per cent in 2013.
The wafer fab equipment (WFE) market closed out 2011 with spending up 13.3 per cent, based on strong momentum in the first half, however, WFE spending is forecast to decrease 12.7 per cent. WFE spending in 2012 will primarily be on leading-edge technology, as the 20mm and 28/32 nm ramp up.
Gartner analysts said wafer fab manufacturing capacity utilisation will decline into the low 80 per cent range by the middle of 2012, before slowly increasing to about 90 per cent by the end of 2012. Leading-edge utilisation will return to the low 90 per cent range by the second half of 2012, providing for a positive capital investment environment.
Back-end equipment markets (which include wafer-level packaging and assembly equipment, die-level packaging and assembly equipment, and automated test equipment (ATE)) will see a modest decline in 2012, but it will be followed by growth and sales of more than $.95 billion in 2013.
“Above market action in advanced packaging will not be sufficient for a positive growth rate this year, but it will be the driver for growth in 2013,” Mr Rinnen said.
The capital spending forecast estimates total capital spending from all forms of semiconductor manufacturers, including foundries, and back-end assembly and test service companies. This is based on the industry's requirements for new and upgraded facilities to meet the forecast demand for semiconductor production. Capital spending represents the total amount spent by the industry for equipment and new facilities, as well as the outlay for land, buildings, furnishings, etc... Capital equipment spending includes all equipment needed to process, inspect, and test and package the chip.