Global billings for chipmaking equipment plummeted in Q1 as the semiconductor industry hunkers down in the trade war between the U.S. and China
Global billings for chipmaking equipment during the first quarter this year plummeted as the semiconductor industry hunkers down in the trade war between the U.S. and China.
Billings in the first quarter plunged 19 percent from the same period a year ago to $13.8 billion, according to global electronics industry association SEMI.
Equipment billings peaked in the first quarter of 2018 at $16.99 billion and have been declining each quarter since that time, according to SEMI.
Investments for memory peaked in 2017, moderated in 2018 and have been dramatically cut in 2019, said Lara Chamness, a senior market analyst at SEMI, in emailed comments to EE Times. Equipment investments in China in 2018 offset some of memory’s softness last year resulting in a strong year for the total equipment market. Both drivers are weaker this year, resulting in a market reset, Chamness said.
The standout in the data was Taiwan, which boosted its first quarter investment while all other regions covered by SEMI turned negative. The island that’s home to TSMC and a host of other semiconductor companies topped the global list at $3.81 billion in billings for the first quarter.
After peaking in 2016 at $12.2 billion, the equipment market in Taiwan contracted for two consecutive years, Chamness said. TSMC’s strong investment in 7nm+ capacity and preparation for the rollout of 5nm is a key part of the growth this year, she added.
SEMI expects that investments in China and in memory will rebound next year, making 2020 a recovery year.
The SEMI data are gathered jointly with the Semiconductor Equipment Association of Japan (SEAJ) from over 80 global equipment companies that provide data on a monthly basis.
Investments in chipmaking equipment are plunging as the outlook for the semiconductor industry sours.
Global chip sales will drop by 7.2% from last year as the semiconductor market works through a supply glut and ducks crossfire from the U.S.-China trade war, market research firm International Data Corporation (IDC) said last month. Other analysts said the outcome could be worse than expected, given a number of negative factors.
Sales this year are set to reach $440 billion compared with $474 billion in 2018, IDC said in a May 15 press statement. This year may mark the first decline after three years of growth.
For 2019, the logic segment is likely to grow 1% to $319 billion while DRAM and NAND are expected to decline in 2019 and 2020, IDC said.