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Used gear to flood declining fab tool market

Posted: 14 Jan 2008     Print Version  Bookmark and Share

Keywords:fab tool vendors  IC equipment market  300mm foundries 

There is more bad news for the IC equipment industry: a glut of used and cheap gear is expected to flood the market.

Based on analysis of probable fab closures and plants for sale, the availability of used equipment will grow from Rs.1,184.35 crore ($300 million) in 2007 to more than Rs.31,582.71 crore ($8 billion) in 2009, according to Semiconductor Partners in conjunction with Semico Research Corp.

''As leading-edge digital memory and logic manufacturers build 300mm fabs for process technologies of 65nm or less, this will obsolete their 200mm fabs at 130nm or 90nm and some of their 300mm fans at 90nm,'' said Morry Marshall, a partner at Semiconductor Partners, a research firm.

''Analogue and mixed signal manufacturers will have a need for these fabs to meet for expansion to satisfy the growing analogue, mixed signal and RF markets,'' he said. ''This creates an opportunity for companies that finance, resell or refurbish used equipment.''

This is good for chipmakers looking for bargains, but bad for fab-tool vendors that are scrambling for business.

2008 is already expected to be a slow year. Amid a slowdown in the IC industry, Gartner Inc. has recently lowered its capital spending forecasts for 2008. Capital spending—and the fab equipment markets—are expected to decline next year.

Overall capital spending is projected to hit Rs.233,317.28 crore ($59.1 billion) in 2007, up 4.9 per cent over 2006, according to Gartner. Capital spending is projected to go into negative territory and fall by 13.2 per cent to Rs.202,524.14 crore ($51.3 billion) in 2008, according to the research firm.

Worldwide semiconductor capital equipment spending is forecast to total Rs.176,863.19 crore ($44.8 billion) in 2007, a 6.8 per cent increase from 2006. The market is expected to hit Rs.159,097.91 crore ($40.3 billion) in 2008, down 9.9 per cent.

VLSI Research Inc. predicts that the IC equipment market will hit Rs.244,371.23 crore ($61.9 billion) in 2008, down 2.8 per cent from 2007. The overall IC market is projected to reach Rs.934,848.28 crore ($236.8 billion) in 2008, up 7.5 per cent from 2007, according to the firm.

- Mark LaPedus
EE Times

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