Semiconductor spending to fall 19.5% in 2012: Gartner

Global semiconductor capital equipment spending is expected to reach $51.7 billion in 2012, with a 19.5 percent decline from projected 2011 spending of $64.2 billion, says research firm Gartner.

"Natural disasters and the economy have certainly impacted the semiconductor capital equipment market in 2011, but we expect equipment spending to increase 13.7 percent in 2011. However, equipment providers will not be as lucky in 2012.

The impact of the slowing macro economy, high inventories and a sluggish PC industry due to both weak demand and the flooding in Thailand will temper the outlook for 2012," said Klaus Rinnen, managing VP at Gartner.

The slowdown is expected to remain through the second quarter of 2012, and by that time the supply and demand should be in balance with the semiconductor side possibly even beginning to see some under supply.

The year 2013 is expected to be the next growth year, with capital spending growing 19.2 percent.

Wafer fab equipment (WFE) revenue is expected to grow 9.8 percent in 2011 and its spending in 2012 will be primarily on leading-edge technology as the 20 nm and 28/32 nm ramp-ups continue.

Gartner expects WFE to decline by 22.9 percent in 2012, bouncing back in 2013 to 23.7 percent The traditional tooling segments will see significant declines in sales in the year 2012, while advanced packaging segments are expected to fall less than is traditional when compared with 2011. The pause in copper bonding solutions is expected to continue through next year, before an aggressive increase in 2013.

The automated test equipment (ATE) market is expected to decline moderately over 2010. Gartner's 2011 expectations are driven by the moderated demand of system-on-chip and the advanced radio frequency segments of the market.

The analysts expect a significant decline in tester sales in the year 2012, though memory systems should hold up reasonably well.