While spending worldwide on semiconductor capital equipment will be flat this year, the market will rebound to reach double-digit growth in 2017, according to the trade group SEMI.

SEMI forecasts capital equipment spending will grow only 1% this year, reaching $36.9 billion, which is an improvement over a 3% decline last year. The better news is that in 2017, capital equipment spending will increase 11% to $41.1 billion.

"After a tepid 2015, device manufacturers are beginning to ramp their investments in key industry segments,” says Denny McGuirk, president and CEO of SEMI. “We expect capital spending to improve for the remainder of 2016 and into 2017.”

Spending on capital equipment was slow at the beginning of the year, but it is expected to accelerate in the second half and continue into 2017 driven by foundries, memory (both 3-D NAND and DRAM), MPU, power management and investments in China, SEMI says.

Taiwan is forecast to continue to be the leader in equipment spending this year with $9.5 billion and $10 billion in 2017. China will be the second-largest spender in 2016 with $6.4 billion, followed by Korea with $6.2 billion. However Korea is forecast to overtake China in spending next year while Taiwan remains in the top spot, SEMI says.

For 2016, front-end wafer processing equipment is forecast to grow 2% to $29.3 billion, up from $28.8 billion last year. Test equipment spending will be flat in 2016 compared to last year, totaling $3.4 billion. Assembly and packaging equipment and other front-end equipment will contract in 2016, falling to $2.4 billion, or negative 5%, and $1.9 billion, or negative 2%, respectively.

By: DocMemory
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