Semiconductor equipment spending returns to positive growth in 2003

DECEMBER 19--After two years of negative results, worldwide semiconductor capital spending and wafer-fab-equipment spending will return to double-digit growth in 2003, and the worldwide semiconductor packaging and assembly segment of the industry is also poised for growth, according to Dataquest Inc., a unit of Gartner Inc. (San Jose, CA; www.gartner.com/semiconductor-mkt). Worldwide semiconductor capital spending is projected to grow 15% in 2003 to $32 billion, up from $27.8 billion in 2002. Worldwide wafer-fab-equipment spending is expected to total $18.5 billion, a 16% increase from 2002 revenue of $15.9 billion.

After declining more than 26% to $24.8 billion in value in 2001, the total semiconductor packaging and assembly marketplace rebounded 7% in 2002 with revenue of $26.7 billion. The market is poised for 10.5% growth in 2003, with revenue of $ 29.6 billion.

New fab activity remained slow in 2002, as lack of demand and overcapacity in the fabs kept the need for new equipment down and focused on technology.

"Technology buys for leading-edge devices have been the key drivers for equipment purchases during 2002 and into 2003. Implementations of technologies associated with copper and 193-nm deep-UV were the bright spots for new equipment purchases in 2002 and will continue to be focal points in 2003," Klaus Rinnen, chief analyst and director of Gartner Dataquest's semiconductor manufacturing group, said.

Gartner Dataquest analysts said that in 2003 the industry needs continued strength in consumer and governmental spending as a foundation for growth, but a corporate spending return is a must to drive demand improvements.