SAN FRANCISCORecent forecasts calling for greater than 50 percent growth in the semiconductor equipment market in 2010 will be far off the mark, according to an analyst, who argues in a new report that the chip equipment industry is not driven by economic data.
In recent weeks, trade group SEMI and market research firm Gartner Inc. have issued forecasts calling for the chip equipment market to grow in excess of 50 percent in 2010, following a decrease of nearly 50 percent in 2009. On Friday (Jan. 22), market research firm iSuppli Corp. issued its own forecast for the fab tool market, calling for 46 growth and bringing to an end three consecutive years of decline.
But according to Robert Castellano, president of market analysis company Information Network (New Tripoli, Pennsylvania), the forecasts from SEMI and Gartner are based on technology purchases for 2010, with no new fabs expected to be built this year and no fabs builts in 2009.
"These comments beg the question how will the equipment market grow 50-plus-percent in 2010 with no new fabs and no new capacity additions, when it dropped nearly 50 percent in 2009 with no new fabs and no new capacity additions?" Castellano said in an email exchange with EE Times.
Castellano further suggested that technology buys alone could not sustain 50 percent growth. Reaching greater than 50 percent growth could require nearly $20 billion in wafer fab equipment purchase for technology improvements, $7 billion more than in 2009, despite the lack of new fabs, Castellano said.
Castellano said it is widely known that semiconductor revenue growth coordinates with economic indicators such as gross domestic product (GDP). However, his analysis shows that semiconductor equipment buys have not coordinated with growth in GDP since the 2001 downturn, Castellano said. One of the major culprits for this has been the move to 300-mm wafers, Castellano said, which utilize half the amount of equipment to process the same number of chips because of the two-times increase in silicon real estate on a 300-mm silicon wafer compared to a 200-mm wafer.
Castellano's analysis seems to overlook the fact that 300-mm equipment is generally more expensive than 200-mm equipment was. However, in response to an inquiry he said that it was thought that 300-mm tools would cost about 50 percent more, but in reality they are only about 20 percent more. It is difficult to access as the additional technological iterations of 300-mm tools over the past 10 years has blurred the price differential," Castellano said.
Despite the heady growth forecasts, many in the equipment business remain more cautious about 2010. At the Industry Strategy Symposium (ISS) last week in Half Moon Bay, Calif., some executives expressed a renewed sense of worry heading into 2010, with some seeing a pause or dreaded double dip for the IC market this year.