Chip Equipment Industry Feels the Pain

SEMI releases Capital Equipment Forecast

SEMI’s mid-year Capital Equipment Forecast, released in San Francisco today, projects 2009 semiconductor equipment sales to reach a mere $14.14  billion (US).

Because of the global economic downturn, the industry association predicts negative growth in all areas of the semiconductor manufacturing industry, resulting in a decline of nearly 52%. This is following a 31% decline in 2008, so the industry will be truly feeling the pain.

SEMI is a global industry association serving the manufacturing supply chains for the microelectronic, display and photovoltaic industries. SEMI President and CEO Stanley Myers reviewed the status of the global semiconductor market at a briefing held today at the SEMICON West exposition.

Even though analysts are forecasting declines for the rest of 2009, signs point to the market rebounding in 2010, with projected annual growth of about 47 percent.

But don’t start celebrating just yet.

“Forecasting has never been more challenging” said Stanley T. Myers, president and CEO of SEMI. Verigy‘s CEO and President, Keith Barnes, pointed out similarities with today’s market and the 1980s, when high gas prices, deregulation, inflation and the Savings and Loan debacle resulted in a global economic downturn, which was followed by a period of economic expansion.  In other words, their crystal ball is still a bit cloudy.

Double-digit improvement in spending next year should improve industry outlook, but the likelihood of inflation will likely dampen the joy, so wait a while before breaking out the Champagne… S|A





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