As new equipment orders recede based on exhaustion of DRAM capital spending budgets, and other segments not increasing their budgets to compensate, the lull in demand for semiconductor equipment has arrived, according to market researchers at Gartner Dataquest.

Semiconductor capital spending is experiencing a shallow correction that started in Q2 to extend into early 2008 translating to growth of less than one percent for this year. After this pause, capital spending growth is expected to revive, but at only about 5 percent for next year. Spending in memory segments will remain the dominant factor in overall market performance, the firm noted.

And, with annual growth in semiconductor device sales anticipated at 2.5 percent, (including solar revenue) and soft DRAM pricing, not much upside hope remains for 2007, the firm believes.

Still, the firm pointed out that equipment spending has moved toward the upper end of its forecast scenarios laid out in April, pointing at a slow single-digit market expansion of 2.7 percent for this year. As for 2008, the firm is forecasting DRAM spending to decline from this year’s peak, and equipment market growth will originate from NAND, logic and foundry, which will drive a second year of slow single-digit growth of 6.2 percent.

At the same time, strong forecast for DRAM unit demand in 2008 negates concerns of overcapacity and provides upside potential for next year.

By: DocMemory
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