Semiconductor capital equipment spending to decline 0.6% in 2005

Gartner says worldwide capital equipment spending is on pace to grow 66% in 2004. Despite this strong growth, the industry will begin to experience a downward cycle in 2005. Capital equipment spending in 2005 is projected to decline 0.6%.

Gartner says while there are concerns for 2005, 2004 is turning out to be one of the best years for the semiconductor capital equipment market. Wafer fab equipment revenue is on pace to rise 72%, while packaging and assembly equipment revenue will grow 49%. Automated test equipment revenue will increase by 52% in 2004.

Worldwide semiconductor wafer fab utilisation reached 94.8% at the end of the second quarter of 2004, up from 93.2% at the end of the first quarter. An excess inventory burn that began in the third quarter broke the advance of utilisation rates, leading to a first but small decline to 94.7%.