Amid a slowdown in the foundry and DRAM sectors, the outlook for the semiconductor equipment industry looks somewhat cloudy, if not challenging, in 2016.

In fact, for equipment vendors, 2016 could resemble the lackluster year in 2015. In 2015, for example, capital spending in the foundry sector fell during the year, although NAND flash began to pick up steam.

Going forward, 2016 could be a relatively sluggish year for the equipment industry. “In general, our estimate is for wafer fab equipment spending in 2016 to remain flat relative to 2015, with some potential upsides,” said Arthur Sherman, vice president of marketing and business development at Applied Materials.

It’s a mixed bag for memory. “Overall, we support the opinion of flat to slightly down WFE in 2016,” Lam’s Kumar said. “Taking a look at the segments, we expect the memory market to be down, which is mostly a result of DRAM. However, within DRAM, we expect to see 20nm conversion spending and some initial 1xnm spending. We think that the weaker overall DRAM will be offset by growth in NAND, primarily relating to 3D NAND.”

The WFE market for DRAM is projected to fall by 10% to 20% in 2016, according to Stifel, Nicolaus. But thanks to strong SSD demand, the WFE market for NAND is expected to grow by 10% to 20% in 2016, according to the firm.

While planar NAND remains robust, 3D NAND continues to generate steam. In total, the installed capacity of 3D NAND is projected to grow from about 150,000 wafer starts per month in 2015, to 300,000 by the end of 2016, according to Stifel, Nicolaus.

“We believe that 3D NAND has a long technology roadmap and we are still in the early innings,” Lam’s Kumar said. “We expect about a quarter of the industry capacity converted to 3D NAND by the end of 2016.”

By: DocMemory
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