Semiconductor equipment sales to fall 20% in 2008, SEMI reports

SAN FRANCISCO–Semiconductor Equipment and Materials International (SEMI) President and CEO Stanley T Myers today reported at the Semicon West trade show here that the industry association expects 2008 semiconductor manufacturing equipment sales will fall approximately 20% this year to $34.12 billion.

While this drop follows 6% market growth in 2007, SEMI believes the semiconductor manufacturing equipment industry will experience a rebound with annual growth of 13% in 2009, and 6% in 2010.

“We began to see equipment spending declines during the second half of 2007, driven by lower spending in the memory sector and a less than favorable device pricing environment. However, expectations for 2009 are leaning toward a solid industry recovery and subsequent growth in the low double digits," Myers (pictured) commented in a statement.

Wafer processing equipment, which is the largest product segment by dollar value, is expected to contract 21% this year to $25.4 billion, while the market for assembly and packaging equipment will decline by 14% to $2.44 billion. At the same time, SEMI expects the market for semiconductor test equipment to decline by 20% to $4.04 billion this year.

On a geographic basis, SEMI said growth is expected to be negative in all regions, except China, where equipment sales are projected to increase 1% over 2007, with the new equipment market in China expected to surpass both the European and Rest of the World markets this year.

Meanwhile, SEMI predicts the Japanese market will reclaim the number one spot from Taiwan, thanks to significant capital expenditure cutbacks in Taiwan this year. According to SEMI's data, Taiwan is expected to fall back to the number two spot, followed by South Korea at number three. The North American market is expected to shrink by 13%, resulting in the fourth largest market for new semiconductor manufacturing equipment, SEMI concluded.