Semiconductor industry in trouble as recession worsens

SEMI, the global semiconductor industry association, has reported that worldwide sales of semiconductor manufacturing equipment declined 31 per cent in 2008 to just US$29.52bn (£20.6bn).

Taiwan was worst hit by the decline, where spending dropped from US$10.65bn (£7.43bn) in 2007 to just US$5.01bn (£3.49bn) in 2008, owing to major cutbacks by sinking memory makers.

Japan saw a drop in spending from US$9.31bn (£6.5bn) in 2007 to US$7.04bn (£4.91bn) in 2008, but still topped the table despite the overall contraction of the market. The country consumed 24 per cent of all worldwide semiconductor materials, thanks to its large wafer fabrication and packaging base.

North America came second with US$5.63bn (£3.93bn), down from last year's US$6.55bn (£4.57bn).

Overall, the global wafer processing equipment market segment sank by 31 per cent, and the assembly and packaging segment by 28 per cent. Total test equipment sales decreased 32 per cent, while other front-end equipment sales dropped 32 per cent.

SEMI added that the semiconductor materials market was markedly flat in 2008 compared with 2007, owing to the worsening economic crisis.

Total revenues for the semiconductor materials market managed to reach only US$42.7bn (£29.8bn) in 2008, while wafer fabrication and packaging materials revenues reached US$24.1bn (£16.8bn) and US$18.6bn (£13bn) respectively.