Semiconductor equipment spending saw record growth in 2010 -

Semiconductor capital equipment spending saw record growth in 2010, but a small decline is expected in 2011, according to a report by industry analyst firm Gartner.

Spending in the sector for 2010 was at $38.4 billion, a massive 131.2 percent increase on the $16.6 billion recorded in 2009. This phenomenal growth is the strongest ever seen by the semiconductor equipment industry and makes a welcome turnaround from 2009, which was regarded as the worst year the sector had endured.

All sectors of the semiconductor equipment industry experienced substantial growth in 2010, ranging from 118 percent to 140.5 percent, with automated test equipment and wafer fab equipment seeing some of the largest increases, bringing in $2.8 billion and $29.7 billion respectively.

While that is positive news, 2011 does not look so bright. A one percent decline to $38 billion is expected in 2011, which is small enough to consider the market essentially flat. 

Equipment purchases are expected to focus more on capacity than technology equipment in 2011, according to Klau Rinnen, the managing vice president of Gartner. 

He suggested that two main trends will influence the market in 2011 and beyond: NAND Flash's capital spending dominance in the memory sector and strong foundry spending due to fierce competition between TSMC, GlobalFoundries and Samsung.