Global spending on fab equipment is expected to decline 14 percent to US$53 billion this year from a year earlier, according to a research report released by global industrial association SEMI on Tuesday last week.
SEMI’s latest prediction is a downward revision from its previous forecast in December last year and highlights how quickly market dynamics have changed over the past three months.
On Dec. 4, SEMI forecast a 7.8 percent decline in global fab equipment spending for this year, due to a fall in memorychip prices and uncertainty over trade tensions between the US and China.
“Spurred by a slowdown in the memory sector, the 2019 downturn marks the end of a three-year growth run for fab equipment spending,” SEMI said in a statement.
However, global fab equipment spending would show a strong recovery of 27 percent to US$67 billion next year, a record, driven by a recovery in memory equipment investment, it said.
Equipment spending by memory manufacturers and pure foundry operators, the two largest, comprised between 80 and 85 percent of total spending over the past two years, the report said.
However, the proportion for the memory sector is forecast to drop to 45 percent this year, from 55 percent in the past, while the foundry sector is expected to hold steady at about 30 percent, it said.
“With memory representing an outsized share of overall spending, any fluctuations in the memory market affects overall equipment spending,” SEMI said, adding that it expects a 30 percent plunge in overall memory equipment spending this year.
New facilities and construction spending this year would total US$15 billion, down 3 percent from last year, with up to US$9 billion spent in the memory sector, primarily for 3D NAND facilities and also for DRAM, while construction spending in the foundry sector would be US$4 billion, the report said.
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