Chip-making kit spend slumps

Surprise, surprise

World+dog is cutting its spending on chip-making equipment. Taiwanese semiconductor companies, for example, will this year spend just over half of what they did in 2000.

TSMC has temporarily halted building work on a second 300mm wafer fab, Taiwan's Economic Times reports. UMC has decided not to build a 300mm wafer plant, either. Marconix has delayed a NT$30 billion investment programme by two years.

The problem is by no means restricted to Taiwan. Market watcher Gartner Dataquest reckons Asia Pacific companies will cut spending by 33 per cent, Japan by 24 per cent, North America by 22 per cent and Europe by 17 per cent.

Globally, sales of chip-making kit will fall 35 per cent on last year's figure of $47.7 billion, the Semiconductor Equipment and Materials International (SEMI) has reported based on a survey of 71 equipment makers.

That broadly matches Gartner Dataquest's numbers, which put spending on equipment at $27.9 billion this year, down 30 per cent on last year's $39.9 billion. Worldwide semiconductor capital spending is projected to be $47.3 billion in 2001, a fall of 26 per cent on last year.

Fab construction delays like those initiated by the Taiwanese chip makers will ensure any recovery for equipment makers will take place later rather than sooner. SEMI's survey suggests chip makers feel the market won't bottom out until the end of the year at the earliest, and probably not well into 2002.

SEMI predicts next year will see a modest, 11.6 per cent increase in sales, from this year's $31 billion to $34.6 billion, followed by 22.5 per cent growth in 2002, to $42.4 billion. Clearly, it's going to be some time before sales rise to 2000 levels. ®

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