Spurred by improved economy and optimism over Internet of Things and wearable devices, semiconductor industry forecasts two years of growth.
After years of underspending on chipmaking equipment, the semiconductor industry is set for two consecutive strong growth years, according to the SEMI industry organization.
The SEMI trade body is forecasting the global market will grow by 20.8 percent in 2014 to reach $38.4 billion and to expand another 10.8 percent in 2015 to exceed $42.6 billion.
One of the reasons for the underspending has been that over the last decade the industry move towards fabless and fab-light business models has been accelerating, leaving only a few foundries and large IDMs prepared to spend on equipment. However, with a more healthy general economy and optimism around wearable electronics and the Internet of Things, there is an eagerness to invest in production capacity for sub 20 nm logic, for 3D NAND flash memory, in DRAM technology upgrades for mobile applications, and expansion of advanced packaging capacity for flip-chip, wafer bumping, and wafer-level packaging.
2014 midyear equipment forecast by market region (Source: SEMI)
As a result, all the regions of the world that SEMI tracks separately are forecast to see equipment spending increases in 2015. Front-end wafer processing equipment is forecasted to grow 11.9% in 2015 to $34.8 billion, up from $31.1 billion in 2014. Test equipment and assembly and packaging equipment is predicted to experience growth next year, rising to $3.1 billion (+1.6%) and $2.6 billion (+1.2%), respectively. The forecast indicates that next year is on track to be the second largest spending year ever, surpassed only by $47.7 billion spent in 2000.
InformationWeek Must Reads Oct. 21, 2014InformationWeek's new Must Reads is a compendium of our best recent coverage of digital strategy. Learn why you should learn to embrace DevOps, how to avoid roadblocks for digital projects, what the five steps to API management are, and more.