Chip-equipment spending to be flat in 2008

Makers of semiconductor manufacturing equipment can extend well into next year.

Photo: Chip-equipment spending to be flat in 2008

Gartner cut its 2008 global spending outlook for chip equipment to $43.7 billion (30.79 billion EUR), down 4.3 percent from its mid-July forecast of $45.7 billion (32.19 billion EUR). Based on its present spending estimate for 2007, chip-equipment spending would be flat in 2008.

The researcher previously anticipated spending would increase 6.2 percent year-over-year.

Gartner said spending on machines to make computer memory will drop, while flash makers and third-party chip contractors will order more equipment.

The market for equipment that makes computer memory has faced an inventory glut this year, sparking a steep decline in average selling prices for the memory chip widely used in personal computers. South Korean Hynix Semiconductor Inc., the world's No. 2 producer by sales in that market, said this week that it stopped supplying the chips to the open market in a bid to shore up plummeting prices.

Signs are emerging that chip makers are planning to spend less in 2008.

Micron Technology Inc., the world's No. 5 maker of computer memory equipment by total sales, said Tuesday that its 2008 capital expenditure budget would be $2.5 billion (1.76 billion EUR), down from $4 billion (2.82 billion EUR) in fiscal year 2007.

Gartner also revised its total semiconductor capital spending forecast for 2008 to $54.6 billion (38.46 billion EUR), down from $59.3 billion (41.78 billion EUR).