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Gartner Says Eight of Top 10 Semiconductor Manufacturing Equipment Vendors Experienced Decline in Revenue |
STAMFORD, Conn., April 6, 2006 — Worldwide semiconductor manufacturing equipment sales totaled $34.5 billion in 2005, a 10.7 percent decline from 2004 revenue of $38.6 billion, according to Gartner, Inc. Slower growth in manufacturing capacity, combined with 65 nanometer (nm) initial production, were the primary drivers for the industry's performance.
“The equipment market decline in 2005 was the result of a number of factors, which worked together to slow the demand for new capacity,” said Klaus Rinnen, managing vice president for Gartner's semiconductor manufacturing and design research group. “Production cuts due to excess inventories in the first half of the year and a slowing in demand growth drove utilization rates downward in early 2005, leading the industry into an oversupply condition. However, a better than initially anticipated macroeconomic environment aided end-user demand, allowing for a resolution of the excess inventory situation by mid-2005.”
The majority of the top 10 vendors experienced revenue declines in line with the overall market performance, with the exception being KLA-Tencor and ASML, which posted revenue gains of 5.6 percent and 1.9 percent, respectively (see Table 1).
Table1
Worldwide Semiconductor Manufacturing Equipment Vendor Revenue Estimates for 2005
(Millions of Dollars)
| Company | 2005 Revenue | 2005 Market Share (%) | 2004 Revenue | 2004 Market Share (%) | Growth (%) |
| Applied Materials | 4,738.5 | 13.7 | 6,310.3 | 16.3 | -24.9 |
Tokyo Electron* | 3,851.7 | 11.2 | 4,040.1 | 10.5 | -4.7 |
ASML | 2,732.6 | 7.9 | 2,682.9 | 7 | 1.9 |
Advantest | 2,089.3 | 6.1 | 2,213.0 | 5.7 | -5.6 |
KLA-Tencor | 1,654.9 | 4.8 | 1,566.8 | 4.1 | 5.6 |
Nikon | 1,507.8 | 4.4 | 1,522.2 | 3.9 | -0.9 |
Lam Research | 1,147.0 | 3.3 | 1,155.1 | 3 | -0.7 |
Novellus Systems | 1,130.1 | 3.3 | 1,198.0 | 3.1 | -5.7 |
Dainippon Screen | 991.5 | 2.9 | 1,051.9 | 2.7 | -5.7 |
Hitachi High-Technologies | 837.5 | 2.4 | 1,022.6 | 2.6 | -18.1 |
Others | 13,793.7 | 40 | 15,832.6 | 41 | -12.9 |
Total | 34,474.6 | 100 | 38,595.5 | 100 | -10.7 |
*During 2005, TEL changed its accounting rules, switching from shipment-based to acceptance-based revenue recognition. Gartner Dataquest is reporting TEL in its 2005 market share reports on its new acceptance-based revenue recognition.
Notes: Data includes revenue from acquisitions in 2005 for the entire year. 2004 data is before acquisitions. Growth is organic as well as through acquisitions.
Source: Gartner Dataquest (April 2006)
“The strength of the lithography segments, driven by 90 nm and 65 nm investment, allowed European and Japanese vendors to gain share, while the overall share of North American companies declined,” Mr. Rinnen said.
After being the fastest-growing region in 2004, the Asia/Pacific region declined by almost 20 percent. After accounting for more than 50 percent of all spending in 2004, the region accounted for 44.5 percent of spending in 2005.
After healthy growth of 48.4 percent in 2004, Japanese equipment spending remained virtually flat in 2005.
European spending was down 1 percent in 2005. European companies continued to invest outside of Europe, while both Intel and AMD continued their expansions in Ireland and Germany, respectively.
In the Americas region, spending increased more than 9 percent in 2005, as expansions occurred in all manufacturing segments.
The market is poised to return to positive growth in 2006, and Gartner analysts said the market is doing better than it previously expected. Gartner's initial forecast was for an 8.4 percent rise in worldwide equipment spending. However, as a result of capital spending increases by various companies, Gartner analysts said equipment spending is expected to experience double-digit growth in 2006.
“While we are more optimistic for 2006, we remain cautious as we see a rising risk of oversupply in the memory segment if current projections do not come true,” Mr. Rinnen said. “Memory-capacity related spending remains hot in 2006, but it is also most vulnerable.”
Additional information is available in the Gartner report, which is located on Gartner's web site, “Semiconductor Manufacturing Equipment Sales Contracted Slightly in 2005.” This document provides final rankings for the top 20 companies worldwide.
This research is produced by Gartner Dataquest's Semiconductors manufacturing and design research group. This research program, which is part of the overall semiconductor research group, provides a comprehensive view of the entire semiconductor industry, from manufacturing and design to device and application market trends. More information on Gartner's semiconductor research can be found on Gartner's Web site at http://www.gartner.com/it/products/research/asset_129175_2395.jsp.
CONTACT:
Tom McCall
(408) 468-8312
tom.mccall@gartner.com
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About Gartner:
Gartner, Inc. (NYSE: IT) delivers the technology-related insight necessary for its clients to make the right decisions, every day. Gartner serves 10,000 organizations, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company consists of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 3,700 associates, including 1,200 research analysts and consultants in 75 countries worldwide. For more information, visit www.gartner.com.
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