Worldwide sales of equipment used to make semiconductors rose in October, the second straight gain after 18 months of declines, an industry group said. The rise may signal a recovery in the global chip market is underway.
Chip equipment sales surged 34.1 percent in October from the same month a year ago to US$2.03 billion, the Semiconductor Equipment Association of Japan said. Sales dipped 13 percent on a month-on-month basis.
Demand for equipment is rebounding as chipmakers such as Toshiba Corp, Japan's biggest chipmaker, and Samsung Electronics Co, which leaped to the No. 2 chipmaking position worldwide this year, expand production capacity.
Worldwide semiconductor sales increased 1.4 percent this year, rebounding from a one-third decline last year, according to preliminary statistics released by market researcher Dataquest Inc last week.
The gain in October's chip equipment sales may lift earnings at many of the world's biggest producers of semiconductor-making equipment, such as Applied Materials Inc in the US, ASM Lithography Holding NV of the Netherlands and Tokyo Electron Ltd, Nikon Corp and Advantest Corp in Japan.
Additionally, sales of certain types of memory chips are on the rise again after tumbling last year. Stronger sales of dynamic random-access memory chips and flash-memory chips, the main memory chips in mobile phones, helped make Samsung Electronics the world's second-largest chipmaker, Dataquest said. Samsung, which was No. 4 last year, increased sales by 30 percent this year to US$8.17 billion, according to Dataquest.
Excluding the revenue from DRAMs, chip sales would have declined 2 percent this year, Dataquest said.
* Chip equipment sales surged 34.1 percent in October from the same month a year ago to US$2.03 billion.
* Worldwide semiconductor sales increased 1.4 percent this year, rebounding from a one-third decline last year.
* Excluding the revenue from DRAMs, chip sales would have declined 2 percent this year.
New demand for chipmaking equipment is also coming from a shift in production to system chips for devices such as portable digital music players and digital cameras. System chips combine various functions on a single piece of silicon.
Last week, Toshiba said it would invest Japanese Yen 350 billion (US$2.9 billion) in two plants where it will produce chips for cellphones and other consumer electronics. Analysts say companies such as Toshiba, Sony Corp, Sharp Corp and Matsushita Electric Industrial Co will probably spend more to expand production as sales of digital consumer electronics gain speed.
"Growing demand for camera-equipped cell phones will increase demand for flash memory and" chips called charge-coupled devices, which are used to produce the images in digital cameras, Mizuho Securities Co analyst Hideki Wakabayashi said.
Still, some chipmakers are cutting back spending plans as a recovery becomes harder to predict.
Intel Corp, the world's No. 1 buyer of chip equipment, in October pared new spending to US$4.7 billion this year from US$5 billion to US$5.2 billion the company budgeted in July.
Chairman Andy Grove said last week there's little growth in chip industry shipments and he doesn't know when that will change.
Also in October, Taiwan Semiconductor Manufacturing Co, the world's biggest supplier of made-to-order chips, said its spending on machinery and equipment this year will be US$1.65 billion, down from the spending of almost US$2 billion it earlier planned.
Spending next year will probably lag this year's, it said.
Chip equipment sales will probably tumble by a third this year because of lower spending at the world's chipmakers, according to Semiconductor Equipment and Materials International, an industry association that counts Applied Materials among its members.
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