Semiconductor Equipment Sales Slump Worsens

Article By : Dylan McGrath

Sales of semiconductor manufacturing equipment continued to slide in March, deepening a sales slump that began late last year

Sales of semiconductor manufacturing equipment continued to slide in March, deepening a sales slump that began late last year with the end of the memory market boom.

The three-month moving average for fab tool sales by North American vendors slipped to $1.83 billion in March, down 1.9% compared to February and down 24.6% compared to March 2018, according to the SEMI trade association.

March marked the fifth-straight month that the three-month average of fab tool sales by North American vendors declined year over year, according to SEMI. The decline was the steepest yet of the down cycle.

“March billings of North American test and assembly equipment manufacturers showed modest improvement over the prior month,” said Terry Tsao, SEMI’s chief marketing officer, in a press statement. “Despite the increase for this segment, overall billings growth expectations for North American semiconductor equipment suppliers appear to be muted for the rest of the year.”

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Market conditions in the semiconductor market and its supply chain are coming back down to Earth after a remarkable three-year run that stands as one of the strongest of all time. From 2016 to 2018, the semiconductor, semiconductor equipment, and semiconductor materials markets all logged three straight years of growth for the first time since the mid-1990s. All three markets set all-time records for sales in 2018.

But the outlook for 2019 is much less rosy. The chip market is widely expected to contract in 2019 by 3% to 7%, while the fab tool market is projected to contract by more than 10%. The semiconductor materials market is expected to grow by about 2% this year, according to SEMI.

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