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Global sales of semiconductor manufacturing equipment by original equipment manufacturers are projected to drop 18.4% to $52.7 billion in 2019 from last year's historic high of $64.5 billion, SEMI, the global industry association representing the electronics manufacturing and design supply chain, reported today in its Mid-Year Total Equipment Forecast.
Released at SEMICON West 2019, the forecast shows growth in equipment sales resuming in 2020, with an 11.6% jump to $58.8 billion. 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 $42.2 billion. The other front-end segment, consisting of fab facilities equipment, wafer manufacturing, and mask/reticle equipment, is expected to slide 4.2% to $2.6 billion this year. The assembly and packaging equipment segment is on track to decline 22.6% to $3.1 billion in 2019, while semiconductor test equipment is forecast to decrease 16.4% to $4.7 billion this year.
Taiwan will dethrone 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% to $9.0 billion. China, Korea, and Taiwan are forecast to remain the top three markets next year, with China rising to the top for the first time. Korea is forecast to become the second largest market at $11.7 billion, while Taiwan is expected to reach $11.5 billion in equipment sales. More upside is likely if the macroeconomy improves and trade tensions subside in 2020.
The Mid-Year Total Equipment Forecast is based on SEMI's industry-recognized World Fab Forecast database and input from equipment manufacturers. Total equipment includes wafer processing, other front end, total test, and assembly and packaging equipment.
The Equipment Market Data Subscription (EMDS) from SEMI provides comprehensive market data for the global semiconductor equipment market. A subscription includes three reports: the monthly SEMI Billings Report, which offers an early perspective of the trends in the equipment market; the monthly Worldwide Semiconductor Equipment Market Statistics (SEMS), a detailed report of semiconductor equipment bookings and billings for seven regions and over 22 market segments; and the SEMI Mid-Year Forecast, which provides an outlook for the semiconductor equipment market.
SEMI connects more than 2,100 member companies and 1.3 million professionals worldwide to advance the technology and business of electronics design and manufacturing. SEMI members are responsible for the innovations in materials, design, equipment, software, devices, and services that enable smarter, faster, more powerful, and more affordable electronic products. Electronic System Design Alliance (ESD Alliance), FlexTech, the Fab Owners Alliance (FOA) and the MEMS & Sensors Industry Group (MSIG) are SEMI Strategic Association Partners, defined communities within SEMI focused on specific technologies.