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Gartner: IC capex to decline 19% in 2012

October 03, 2011 // Dylan McGrath

Gartner: IC capex to decline 19% in 2012

Worldwide semiconductor capital equipment spending will total about $35.2 billion in 2012, representing a 19.2 percent decline from the projected 2011 total of $43.5 billion, according to the latest forecast from market research firm Gartner Inc.


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Worldwide semiconductor capital equipment spending will total about $35.2 billion in 2012, representing a 19.2 percent decline from the projected 2011 total of $43.5 billion, according to the latest forecast from market research firm Gartner Inc.

Gartner blames excess electronics inventory and poor spending demand as a result of the slowing macro economy for the anticipated decline.

"The slowdown appears to be across the board," said Klaus Rinnen, managing vice president at Gartner, in a statement. "While it appears the foundries will continue their capacity race at 28 nanometers (nm), spending on 45- to 90-nm technologies is slowing, and some equipment from those technology nodes is being used for 28-nm production to help increase capacity utilization.".

Rinnen said capital spending by NAND memory chip makers has also softened due to weaker-than-expected growth in the production of media tablets.

Gartner said its analysts expect the slowdown to last for the remainder of 2011 and into the first half of 2012. By mid-2012 Gartner expects the supply and demand to be more in balance, so DRAM and foundry will need to begin to increase spending to meet an increase in demand as the PC market rebounds and consumers begin spending once the economy stabilizes a bit.

Gartner predicts that semiconductor industry capital spending will increase in 2013 by 18.4 percent.




Click on image to enlarge.

Gartner said worldwide wafer fab equipment (WFE) sales began slowing in the second quarter and the firm expects the decline to accelerate in the second half of the year with the added pressure of slowing device sales and excess inventory liquidation. WFE revenue is forecast to grow 9.4 percent in 2011, but decline 19.6 percent in 2012, Gartner said.
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