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STAMFORD, Conn., July 14, 2015

Gartner Says Worldwide Semiconductor Capital Spending to Increase 2.5 Percent in 2015

Reductions in Memory Spending Will Result in a 3.3 Percent Decline in 2016

Worldwide semiconductor capital spending is projected to grow 2.5 percent in 2015, to $66.1 billion, according to Gartner, Inc. This is a down from the 4.1 percent growth predicted in the previous quarter's forecast (see Table 1).

"Since the previous quarter's forecast, continued weakness in the euro and yen have created major weaknesses in the overall equipment market picture," said Bob Johnson, research vice president at Gartner. "With over half of all equipment being produced by either Japanese or European suppliers, the weakness in their currencies has been the primary factor in our reducing our overall outlook for 2015. Longer term, we expect modest growth throughout the semiconductor cycle, with just a pause in the equipment market growth expected in 2016, as DRAM goes through a typical cyclical downturn."

 

Table 1

Worldwide Semiconductor Capital Spending and Equipment Spending Forecast, 2014-2019 (Millions of Dollars)

 

2014

2015

2016

2017

2018

2019

Semiconductor Capital Spending ($M)

 

64,569.8

 

66,156.6

 

63,952.0

 

65,733.0

 

69,152.1

 

72,237.3

Growth (%)

11.6

2.5

-3.3

2.8

5.2

4.5

Wafer-Level Manufacturing Equipment ($M)

 

 

33,684.1

 

 

33,726.9

 

 

32,532.7

 

 

35,676.6

 

 

39,072.2

 

 

40,354.7

Growth (%)

16.2

0.1

-3.5

9.7

9.5

3.3

Wafer Fab Equipment ($M)

 

31,953.0

 

31,903.8

 

30,732.4

 

33,634.2

 

36,652.1

 

37,844.0

Growth (%)

16.3

-0.2

-3.7

9.4

9.0

3.3

Wafer-Level Packaging and Assembly Equipment ($M)

 

 

1,731.1

 

 

1.823.1

 

 

1,800.3

 

 

2,042.4

 

 

2,420.1

 

 

2,510.7

Growth (%)

14.3

5.3

-1.3

13.4

18.5

3.7

Source: Gartner (July 2015)

 

Foundries will continue to outspend the logic integrated device manufacturers (IDMs) in 2015. Worldwide foundry spending is forecast to increase 17.2 percent, in contrast with the 1.4 percent decline in total logic spending. However, the longer-term outlook for total logic spending is strong as predicted mobility market saturation will dampen the need for new capacity and create an environment where existing capacity is upgraded to the latest node.

Worldwide memory capital spending remains strong for 2015, with a 3.2 percent increase anticipated, compared with a 10.2 percent increase in the previous quarter's forecast. The reduction from the previous forecast is a result of spending announcements by major manufacturers, which were lower than previously anticipated, and reflected the fact that major equipment types are cheaper due to weaknesses in exchange rates. Memory manufacturers currently enjoy a strong chip-pricing environment, which sets the stage for continued spending growth through 2015. However, an anticipated oversupply in DRAM in 2016 will lead to a 13.6 percent decrease for worldwide memory spending next year.

Wafer-level equipment spending is forecast to increase 0.1 percent in 2015, as manufacturers pull back on new fab construction and concentrate instead on ramping up new capacity. "As we get better visibility into individual company spending plans for 2015, it is apparent that caution is a prevailing sentiment, with the exception of memory, where manufacturers are adding capacity in response to favorable market conditions," said Mr. Johnson.

This research is produced by Gartner's Semiconductor Manufacturing program. This research program, which is part of the overall semiconductor research group, provides a comprehensive view of the entire semiconductor industry, from manufacturing to device and application market trends.

Additional analysis on the outlook for the semiconductor market can be found in the Gartner Webinar "2Q15 Semiconductor Manufacturing Forecast Update."

About Gartner

Gartner, Inc. (NYSE: IT), is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and objective resource for more than 15,000 organizations in more than 100 countries — across all major functions, in every industry and enterprise size.

To learn more about how we help decision makers fuel the future of business, visit gartner.com.

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