Wafer fabs to spend 8.9% less on equipment in 2012; utilization rates improve

June 25, 2012 — Worldwide wafer fab equipment (WFE) spending will total $33 billion in 2012, down 8.9% from 2011’s $36.2 billion spending level, say Gartner Inc. analysts. Chipmakers will spend more than $35.4 billion on WFE in 2013, ramping 7.4% over this year. See Gartner’s total capex expectations here.

WFE spending started off strong in 2012. “Foundries and other logic manufacturers ramped up sub-30-nm production,” said Bob Johnson, research vice president at Gartner. New equipment demand was stronger than originally anticipated, he explained, because of high demand for leading-edge devices. Yields at these nodes had yet to mature. As yields improve, demand for new logic production equipment will soften, weakening WFE demand for the tail end of 2012. Expect capital spending restraints through H2 2012 to weigh down new capacity additions; overall utilization rates will return to normal levels at the start of 2013.

Also read: Capex expectations update for TSMC, GLOBALFOUNDRIES, SMIC, UMC, more

Wafer fab manufacturing capacity utilization fell into the mid-80% range by the middle of 2012. Expect utilization rates to slowly increase to about 87% by year’s end. Leading-edge utilization will return to the high-80% range by H2 2012, and move into the low-90% range through most of 2013, supporting a positive capital investment environment.

Following an inventory correction earlier in the year, production returning to “more-normal levels,” said Johnson. “Increased demand, combined with less-than-mature yields at the leading edge, is consuming increased capacity, with the result that utilization will begin to climb upward again in the second quarter of 2012.”

The semiconductor industry was ramping up different technology nodes in 2011, which continued in 2012, driving a broad spectrum of equipment segment sales. Foundry is ramping up 28nm, leading-edge logic has transitioned to 20nm, NAND flash will ramp up the 1X node, and DRAM will be ramping up 4X and 3X nodes. Gartner analysts expect equipment manufacturers to face different issues at each node, a taxing prospect.

Additional information is available in the Gartner report, "Forecast: Wafer Fab Capacity Picture for Top Capital Spenders, Worldwide, 2010-2013, 2Q12 Update." This forecast report is on Gartner’s website at http://www.gartner.com/resId=2055915.

Gartner Inc. (NYSE: IT) provides information technology research and advisory services. For more information, www.gartner.com.

Visit the Semiconductors Channel of Solid State Technology!


Easily post a comment below using your Linkedin, Twitter, Google or Facebook account. Comments won't automatically be posted to your social media accounts unless you select to share.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>


Thin wafer processing temporary bonding adhesive film for 3D wafer integration
03/24/2015 AI Technology, Inc (AIT) is the first known provider of a film format high temperature temporary bonding adhesive for thi...
Dramatic results achieved in cleaving glass using ultra-short pulsed lasers
03/11/2015ROFIN-SINAR, Inc. introduces the SmartCleave FI laser process and the MPS glass handling system for high speed and precise cl...
MKS introduces the Cirrus 3-XD Atmospheric gas analysis system
03/10/2015MKS Instruments, Inc., a global provider of technologies that enable advanced processes and improve productivity, has introduced the Cirru...