Fri, Dec 16, 2011 - Page 11 News List

Cuts forecast in semiconductor makers’ investment

By Kevin Chen  /  Staff Reporter

Global semiconductor makers are expected to lower their investment in capital equipment by 19.5 percent next year from this year as the negative macroeconomic environment weakens market demand, information technology researcher Gartner Inc said yesterday.

Capital spending on semiconductor equipment would total US$51.71 billion next year, compared with an estimated US$64.24 billion this year, Gartner said in a statement.

The drop is slightly more than a 19 percent decline that Gartner predicted in late September, while a June forecast foresaw just a 2.6 percent reduction.

The projected US$64.24 billion in semiconductor capital spending this year is 13.7 percent higher than the US$56.53 billion reported last year, although the industry has been affected by natural disasters and the slowing global economy, Gartner said.

“However, equipment providers will not be as lucky in 2012,” Gartner managing vice president Klaus Rinnen said in the statement. “The impact of the slowing macroeconomy, high inventories and a sluggish PC industry — due to both weak demand and the flooding in Thailand — will temper the outlook for 2012.”

The global semiconductor market is facing an increasing threat posed by the uncertainty over the eurozone debt problem, the impact of Thailand’s floods and weakening consumer demand.

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s top contract chipmaker, twice cut its capital spending budget this year because of deteriorating market conditions.

In October, TSMC said its capital spending for next year would continue to decline from this year’s US$7.3 billion.

Last month, Credit Suisse predicted TSMC would trim nearly 25 percent off its capital spending for next year to US$5.5 billion.

In a press release issued last Thursday, Gartner forecast semiconductor sales worldwide would increase 2.2 percent year-on-year to US$309 billion next year, a forecast that was lower than the forecast of an 4.6 percent increase it made in the third quarter.

Gartner said yesterday the global slowdown would last through the second quarter of next year.

However, global equipment spending was likely to recover in 2013 on increased investment in DRAM and foundry equipment, showing a 19.2 percent increase year-on-year to US$61.63 billion, the company said.

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