Capital spending by chip makers on semiconductor manufacturing equipment will decline to $35.2 billion in 2009, down 17.6 percent from 2008, iSuppli said. This will mark the lowest level of spending since 2003, when semiconductor capital spending amounted to $33.8 billion, according to the research firm's latest forecast.

The firm is projecting that 2008 chip equipment revenue will be $42.7 billion, down 21.1 percent from $54 billion in 2007.

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Len Jelinek, director and chief analyst for semiconductor manufacturing at iSuppli, said in a statement that equipment spending levels were already depressed in the first half of 2008, but dried up considerably more by the end of the third quarter.

According to iSuppli (El Segundo, Calif.), in addition to the general downturn in the industry, the massive capital expansion for new capacity in China that the equipment industry was counting on to drive growth has failed to emerge. China has been unable to establish a technological manufacturing base that requires the use of advanced technologies and expensive new semiconductor manufacturing equipment, iSuppli said.

There have been multiple indications in recent weeks that China's drive to become a global semiconductor manufacturing power may be waning. A recent report found that investment in China's chip and microelectronics industry has been slowing down for more than a year.

By: DocMemory
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