Wafer Fab Equipment Spending in 2012 is Projected to be Above $30 Billion

Published:2012/2/20 21:50:00 Author:Phyllis From:SeekIC

According to Applied Materials, despite overcapacity in key markets, wafer fab equipment spending in 2012 is projected to be above $30 billion. In 2011, the FEOL capital spending exceeded its previous forecast, reaching approximately $35 billion at the end of the year. As memory makers implemented device shrinks by upgrading lines with 193 ArF immersion systems, spending on lithography equipment were said to reach records high.

Sales for Applied in 2011 had been strong in the inspection, transistor, deposition and electroplating businesses. Applied was currently estimating spending to be in the range of $30-35 billion this year, flat to down 15%.

Mobile devices are the driving forces. In the fourth calendar quarter, smartphone unit sales were said to have surpassed PCs for the first time, with an expectation that 600 million to 700 million smart phones would be sold in 2012, an increase of 35% year-on-year.

Smartphones and tablets are driving demand for application processors and as these processors become increasingly sophisticated, we are seeing a significant increase in die sizes. As a result, foundries are aggressively investing as they ramp production at the 3x and 2x nodes, said Applied.

Applied is favorably exposed to foundry investment. In the first quarter, the company saw 75% increase in revenue from these customers and expect sequential growth of over 40% in our second quarter, driven by record quarterly sales in its front-end products, metal deposition products and implant.

Applied did claim to gain market share in 2011 in the areas of ECP, claiming it gained double digits last year. In metal deposition, in CVD and inspection, the company also claimed market share gains. However, it lost market share in CMP and etch, though management claimed it had a good chance to bounce back in 2012, though didn’t provide specifics on how that would happen.

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