Basic economics helped bring worldwide semiconductor manufacturing equipment sales up 10.3 percent in 2003, according to Gartner.

Gartner analysts attributed the $22.8 billion in revenue to improved supply and demand fundamentals, which rekindled demand for equipment in the second half of 2003.

Broken down, wafer fab equipment sales, the largest sector, grew 3.6 percent in 2003. In the back-end, packaging and assembly equipment increased 30.5 percent and automated test equipment grew 39.4 percent, the firm reported.

"Semiconductor manufacturing equipment shipments were focused on upgrades at existing facilities, production capacities for 0.13-micron or 300mm, advanced packaging capacity and system-on-chip test capability," said Klaus Rinnen, a Gartner VP, in a statement.

Meanwhile, Gartner said that vendors experienced mixed results in 2003. The market was kinder to companies in longer lead-time segments. Despite a 12 percent decline in revenue, Applied Materials was the No. 1 vendor based on global semiconductor equipment sales in 2003. Tokyo Electron had a strong year because of its strength in the DRAM segment, as well as its home market. Advantest, the world's largest test company, experienced the strongest growth among the top-tier vendors, as its revenue increased 114 percent, according to the firm's data.

Regionally, semiconductor manufacturing equipment demand in Japan rose 39 percent last year. Europe saw the second strongest growth with 16 percent, driven by a revival in device equipment spending by European-headquartered companies and also investments into Europe. Despite China's hype, increased spending in Asia/Pacific rose only 5.5 percent. Worse off, however, was the Americas region, which suffered a 17.5 percent decline in equipment sales in 2003, marking the third consecutive year of reduced equipment spending.

Gartner said it expect stronger sales in 2004, with worldwide semiconductor equipment revenue projected to grow 40 percent.

"We expect a continuation of strong demand in the back-end segment and finally a strong revival for wafer fab equipment this year," Rinnen said. "With economic conditions improving, end-user application demand continues to expand. Low inventories and tight supplies have established an advantageous pricing environment. With profitability strengthening throughout the industry, spending is ramping up as semiconductor manufacturers adjust to meet rising demand."

By: DocMemory
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