As a barometer for the global supply chain, the semiconductor industry remains a solid measurement. Recent figures in this area may have given the electronics industry pause. However, a long view yields better news.
Worldwide semiconductor manufacturing equipment spending is projected to total $34.6 billion in 2013, an 8.5 percent decline from 2012 spending of $37.8 billion, according to Gartner. The decline is linked to reduced 28-nanometer investment associated with demand shifts in the mobile market.
Not surprisingly, an annual forecast from SEMI, the global industry association, released its annual shipment forecast for the semiconductor industry early this month, saying that shipments for 2013 are forecasted to grow at just a single percentage point.
According to SEMI, polished and epitaxial silicon shipments will total 8,876 million square inches in 2013. “Economic uncertainty continues to hamper silicon demand,” said Denny McGuirk, president and CEO of SEMI, in a press release. “We expect 2013 silicon shipment volumes to remain essentially flat when compared to 2012 and increase in 2014 and 2015.”
The news isn't all bad though, especially looking to the future. Said Dean Freeman, research vice president at Gartner, in a press release:
Semiconductor equipment quarterly revenue is beginning to improve, and positive movement in the book-to-bill ratio indicated that spending for equipment will pick up in the remainder of 2013. Looking beyond 2013, we expect that the current economic malaise will have worked its way through the industry, and spending will follow a generally increasing pattern in all sectors throughout the rest of the forecast period.
Gartner predicts that spending will be weighted toward the end of this year. 2014 semiconductor capital spending will increase 14.1 percent, followed by 13.8 percent growth in 2015, Gartner predicts. “In 2013, the wafer fab equipment (WFE) picture is one of continuous quarter-over-quarter growth as major manufacturers come out of a period of high inventories and a generally weak semiconductor market,” Freeman said.
Looking further down the road, a mild decline of 2.8 percent in 2016 will signal natural market cycles, and growth will return the following year, the market research firm believes.
SEMI's annual forecast, meanwhile, predicts that silicon shipments will reach record levels in 2014 and 2015. Polished and epitaxial silicon shipments are predicted to reach 9,230 million square inches in 2014 and 9,684 million square inches in 2015.
Gartner also believes that fab utilization will also increase both in the short and long term. In the first half of this year, utilization hovered in the high-70 percent to low-80 percent range. Early next year, those levels will build to mid-80 percent range.
Clearly, 2013 won't be a record-breaking year in the semiconductor market. The supply chain, however, can look forward to solid gains going forward.