TAIPEI - Sales of semiconductor manufacturing equipment will rise slowly until the fourth quarter and then accelerate as more companies start to outfit 300mm wafer fabs and transition to 90-nanometer process technology, according to a recent report by research firm Strategic Marketing Associates.
The Santa Cruz-based firm said it is expecting the equipment industry to return to double digit growth next year, spurred by an increase in fabs using 90nm technology. The number is expected to rise from four in the first quarter of this year to almost 50 by mid-2004, the company said. During the same period, spending for 300mm wafer equipment will double, to reach its highest point since 2001, as 15 new 300mm fabs come on-line by mid-2004.
Even though North America and Europe still account for the lion's share of equipment spending, China's influence is slowly being felt, too. SMA said there are more fabs being built in China than in any other part of the world.
"China is now growing as fast as Korea or Taiwan did during their growth periods," said George Burns, president of SMA, which specializes in foundry information. "The country's share of equipment spending, for example, will grow from 11 percent of the total in the first quarter of this year to 15 percent by the second quarter of 2004."
Observers have noted, however, that while China may be boosting equipment makers' top-line numbers, it doesn't necessarily translate into bottom line gains. China is also becoming a good market for used equipment, which further erodes profits.
Overall, Burns is optimistic about the next several months. "In this still uncertain time, we can see the beginnings of the turnaround. When, not if, overall chip sales begin to increase, along with an improving economy, we'll see an even healthier forecast next quarter," he said.
