After 2005 drop, chip gear sales to rebound in 2006

Global sales of chip production equipment will likely rise 9.1 percent next year after falling this year amid declining orders in nearly all regions, SEMI said.

Global sales of chip production equipment will likely rise 9.1 per cent next year after falling this year amid declining orders in nearly all regions, according to the industry group, Semiconductor Equipment and Materials International (SEMI).

Global chip equipment sales in 2005 were projected to reach $US32.95 billion, down from a banner 2004 when the market leapt 67 per cent to $US37.11 billion, SEMI said.

But next year, sales of chip making machinery was expected to rise to $35.97 billion, the group said.

The industry trade group characterised this year's decline as cyclical, since it came after a robust 2004. The chip equipment industry follows a boom and bust pattern similar to the chip industry. In boom years, companies tend to overinvest in new production lines, leading to over production and declines in chip prices. This year, the industry had forecast a down year for chips, causing many companies to approach factory investments with more caution.

China posted the largest percentage decline in chip equipment purchases this year, a 54.1 per cent drop in purchases to $US1.24 billion, SEMI said.

Taiwanese chip makers also ordered less machinery this year, down 24.3 per cent to $US5.88 billion.

Japan remained the top buyer of semiconductor making equipment. After growing more than 49 per cent last year, the Japanese market declined only 2.8 per cent to $US8.04 billion this year, SEMI said.

South Korea was the only major chip producing country to increase equipment purchases this year, up 27.8 per cent to $US5.89 billion and good enough to overtake Taiwan as the second largest chip equipment buying economy this year.

North America ($5.79 billion) was fourth, down less than 1 per cent compared to last year. Europe ($3.19 billion) was down 7.4 per cent from last year.

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Dan Nystedt

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