2012 Year-End Consensus Forecast

By Lara Chamness
While the first half of the year started out with strong booking and billing activity, continued economic uncertainty has led many device manufacturers to cut back on their equipment investments during the second half of this year. The recently published SEMI Year-End Consensus Forecast predicts that the new equipment market will contract 12.2 percent for this year (to $38.2 billion) and decline another 2.1 percent for 2013, with an overall market gain of 12.5 percent expected for 2014. This year-end forecast contrasts sharply with the Mid-Year Forecast SEMI presented in July, which anticipated a 2.6 percent decline this year. As such, it is helpful to think of SEMI’s consensus forecast as a measure of industry-wide sentiment for the entire new equipment industry, which includes equipment for both fabs and test and packaging houses.

Unlike SEMI’s World Fab Forecast, the SEMI Year-end Consensus forecast focuses only on new equipment and covers both “front-end” and “back-end” equipment. The Year-End Consensus forecast predicts that wafer processing equipment, the largest product segment by dollar value, is anticipated to decrease 14.8 percent in 2012 to total $29.3 billion, on par with 2010 spending levels. The forecast predicts that the market for assembly and packaging equipment will decline by 5.1 percent to $3.2 billion in 2012. The market for semiconductor test equipment is forecasted to decline by 4.8 percent, reaching $3.6 billion this year. On the positive side, the “Other Front End” category (fab facilities, mask/reticle, and wafer manufacturing equipment) is expected in increase 6.3 percent in 2012.

Korea, Taiwan, and North America are the largest spending regions, though only Korea and Taiwan are expected to show an increase in spending for 2012—Taiwan (12.7 percent increase over 2011) and South Korea (10.7 percent increase). In 2012, Taiwan and South Korea each will reach equipment sales of $9.6 billion, with North American sales totaling $8.0 billion. Rest of World (ROW), Europe, and Japan will be the most negatively impacted in 2012.

Projects driving the Korean equipment market this year include but are not limited to Samsung ramping Lines 16, S1-A and S1-C and making technology upgrades to many of its other lines, as well as SK Hynix upgrading M10 and M11(+M4) and ramping M12. TSMC is making significant investments in Fab 12, Fab 14, and Fab 15 this year, while other smaller device manufacturers are making non-trivial investments in the region.

In 2013, China, Taiwan and Japan are expected to have slight to moderate positive growth, with all other regional markets contracting, resulting in another 2.1 percent reduction in sales. 2014 sales are expected to rebound, increasing 12.5 percent with all regions registering positive growth.

The following results are given in terms of market size in billions of U.S. dollars.

SEMI 2012 Year-End Equipment Forecast by Market Region

The SEMI Industry Research and Statistics group provides timely market and trend information for market research, competitive analysis, and sales forecasting. We focus on the global semiconductor capital equipment, selected materials markets and fab forecasting data. Please visit www.semi.org/marketinfo for additional information.

SEMI has a long tradition of generating “Consensus Forecasts” for new semiconductor equipment. These forecasts are published two times a year in conjunction with SEMICON West in July and SEMICON Japan in December. The intent of these forecasts is to provide a gauge of member sentiment for market conditions. SEMI bases this forecast on monthly “bookings and billings” data that it collects directly from semiconductor equipment suppliers, data from the SEMI World Fab database, and feedback from equipment suppliers. The “Consensus Forecast” covers both “Front-end” equipment (typically associated with wafer fabrication) and “Back-end” equipment (equipment used to package and test individual devices). The “Consensus Forecast” contrasts to the “bottoms-up” forecast generated by the World Fab database, which bases its projections on CapEx announcements by device manufacturers and only covers fab equipment, including used and equipment manufactured directly by fabs.

—Lara Chamness is a senior market analyst for SEMI industry research and statistics.