FEBRUARY 23--The semiconductor-equipment market will experience extremely robust growth in 2004, says Advanced Forecasting (Saratoga, CA; www.adv-forecast.com/afi/), a semiconductor forecasting house. Currently, the IC cycle is in a boom period, overcapacity has been eliminated, and equipment will undergo a considerable ramp up.
"Based on our quantitative forecasting model for equipment, Advanced Forecasting believes that growth for 2004 will be stronger than 55% over 2003," said Rosa Luis, director of marketing and sales for Advanced Forecasting. "The semiconductor-equipment market is coming from such a low bottom, due to reduced capital investment from 2001, that to keep up with escalating IC demand, equipment will have to grow very quickly."
In the last several weeks, a number of foundries and IDMs have released their expected capital expenditure budgets for 2004. The majority of these announcements showed more than 30% growth over 2003, supporting Advanced Forecasting's position that the industry will add needed capacity quite rapidly. "Currently, actual equipment shipments are significantly below our quantitative forecast of underlying demand," said Luis. "The overcapacity experienced in 2000 has largely been eliminated, and, with 300-mm technology becoming prevalent, we'll experience the strong upsurge in equipment needed to realign with industry demand. Because this expansion has been delayed, prices are escalating and lead-time for equipment is growing, laying the groundwork for an overheated situation."
Bookings for semiconductor equipment have already risen steadily since their bottom in 2Q-2003. Cumulative bookings during 2003 amounted to $22.3 billion, an 11% growth over 2002. While the IC industry began recovering from the 2001 recession in 2002, equipment revenue remained flat due in large part to overcapacity from the 1999--2000 boom.
