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.
. We've got a management crisis right now, and we've also got an engagement crisis. Could the two be linked? Tune in for the next installment of IT Life Radio, Wednesday May 20th at 3PM ET to find out.