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| Gartner Dataquest Says Worldwide Semiconductor Capital Spending and Equipment Market Struggled in 2001 |
| 2002 Marks the Beginning of the Road to Recovery |
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SAN JOSE, Calif., January 7, 2002 - As the overall semiconductor market suffered the worst decline in its history in 2001, the worldwide semiconductor capital spending and equipment markets revenue declined by 29 and 37 percent, respectively, according to preliminary statistics by Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB). Worldwide semiconductor capital spending totaled $44.4 billion in 2001, a 28.9 percent decline from 2000. Semiconductor equipment spending declined 36.8 percent, from $39.9 billion in 2000 to $25.2 billion in 2001.
"The manufacturing challenges in the industry were readily apparent in 2001," said Klaus Rinnen, chief analyst and director of Gartner Dataquest's semiconductor manufacturing group. "As demand weakened and capacity utilization decreased, financial considerations became foremost in everyone's mind. Thus capital expenditures took a back seat to everyday production needs." Gartner Dataquest analysts believe 2002 will be the transition year to recovery, with the most likely scenario of a sustainable recovery for the semiconductor device and capital equipment industries occurring in the second half of this year. Demand is extremely weak in the equipment market, but Gartner Dataquest forecasts an acceleration in capital equipment spending driven by a tightening of leading-edge capacity in the second half of this year. Still, it will not be enough to contain the decline in equipment spending, as the market is forecast to decline 19 percent in 2002. Capital spending cuts occurred in all regions during 2001. Led by foundries and DRAM, Asia/Pacific companies cut deepest at nearly 47 percent decline, with Taiwan cutting deepest by over 50 percent. U.S. and European companies curtailed spending by 21 percent and 26 percent, respectively. Japanese companies cut spending by about 18 percent. As overcapacity remains rampant in 2002, capital spending restraints will continue with further cuts of about 24 percent this year. There is a glimmer of hope that foundry providers might cut some spending loose before year-end, providing an upside to spending. "A macroeconomic recovery and returning electronic equipment demand should finally bring the demand-component of the down cycle under control. However, overcapacity remains excessive and still demands industry attention," said Rinnen. "With demand firming, the semiconductor industry will be afforded increasing visibility, finally being able to plot its course to another up cycle." This research is produced by Gartner Dataquest's Semiconductor and Electronics Manufacturing Cluster. This research group is designed to help companies focus on real opportunities in semiconductor manufacturing and procurement covering the entire value chain of services, equipment and materials on through to the procurement of chips. To subscribe to this service, please call 408-468-8000. Reports can be purchased on the Internet at www.gartner.com. Gartner Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry. Gartner, Inc. is a research and advisory firm that helps more than 11,000 clients understand technology and drive business growth. Gartner's divisions consist of Gartner Research, Gartner Consulting, Gartner Measurement and Gartner Events. Founded in 1979, Gartner, Inc. is headquartered in Stamford, Connecticut and consists of 4,300 associates, including 1,200 research analysts and consultants, in more than 90 locations worldwide. The company achieved fiscal 2001 revenue of $952 million. For more information, visit www.gartner.com. |
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Contact: Christy Pettey 408-468-8312 christy.pettey@gartner.com |
