The Chip-Equipment Disconnect

In 2002, 38.2% of equipment purchased by the semiconductor manufacturers was for 300-millimeter production, and 1.4% of silicon wafers processed were 300-millimeter in diameter. In 2008, 92.1% of equipment purchased was for 300-millimeter production and 37.4% of silicon wafers were 300-millimeter.

As the percentage of 300-millimeter wafers increases, the divergence in semiconductor equipment purchases compared with semiconductor sales will continue to increase. Semiconductor companies, led by International Sematech, are pushing for a transition to 450-millimeter wafers, which, in our opinion, will be the death knell for a large number of equipment manufacturers. It is critical that semiconductor equipment manufacturers boycott 450-millimeter development.

The good news is that our leading indicators, which forecast out four to six months, continue to point up for the equipment industry, as illustrated in the chart below. But based on our analyses, the "salad days" are over for the equipment industry.

Data in this article come from our report "The Global Market for Equipment and Materials in Semiconductor Manufacturing," details of which are on our Web site.

Comparison of Semiconductor Equipment Sales and Proprietary Leading Indicators Source: The Information Network

-- Written by Robert Castellano in New Tripoli, Pa.

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