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Chip equipment body sees 18.4% fall in global sales in 2019

The Star Online logo The Star Online 11/7/2019 JOSEPH CHIN
a circuit board: SEMI said on Thursday global sales of semiconductor manufacturing equipment by original equipment manufacturers were projected to drop to US$52.7bil in 2019 from last year’s historic high of US$64.5bil. © Provided by SMG Business Services Sdn Bhd. SEMI said on Thursday global sales of semiconductor manufacturing equipment by original equipment manufacturers were projected to drop to US$52.7bil in 2019 from last year’s historic high of US$64.5bil.

KUALA LUMPUR: The US-based Semiconductor Equipment Manufacturing Industry (SEMI) provided a downbeat outlook for the industry as it forecast global sales to fall by 18.4% this year due to geopolitical tensions before recovering next year.

SEMI said on Thursday global sales of semiconductor manufacturing equipment by original equipment manufacturers were projected to drop to US$52.7bil in 2019 from last year’s historic high of US$64.5bil.

SEMI, the global industry association representing the electronics manufacturing and design supply chain, reported in its Mid-Year Total Equipment Forecast that growth in equipment sales would resume in 2020.

However, it was more optimistic for 2020 and it expects a 11.6% jump to US$58.8bil. 

SEMI said the current forecast reflects recent downward adjustments in capital expenditures and rising market uncertainty due in part to geopolitical tensions.

The SEMI Mid-Year Forecast shows wafer processing equipment sales falling 19.1% in 2019 to US$42.2bil. 

The other front-end segment, consisting of fab facilities equipment, wafer manufacturing, and mask/reticle equipment, is expected to slide 4.2% to US$2.6bil this year. 

The assembly and packaging equipment segment is on track to decline 22.6% to US$3.1bil in 2019, while semiconductor test equipment is forecast to decrease 16.4% to US$4.7bil this year.

SEMI forecast Taiwan will dethrone South Korea as the largest equipment market and lead the world with 21.1% growth this year, followed by North America with an 8.4% uptick. 

China will maintain the second spot for the second consecutive year, and Korea will fall to third after throttling back capital expenditures. All regions tracked except Taiwan and North America will contract this year.

SEMI forecasts that, in 2020, the equipment market is expected to recover on the strength of memory spending and new projects in China. 

Equipment sales in Japan will surge 46.4% percent to US$9bil. China, Korea, and Taiwan are forecast to remain the top three markets next year, with China rising to the top for the first time. 

South Korea is forecast to become the second largest market at US$11.7bil, while Taiwan is expected to reach US$11.5bil in equipment sales. More upside is likely if the macroeconomy improves and trade tensions subside in 2020.

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