Capital spending by the semiconductor industry will not recover until 2010, according to the latest forecast from Gartner. This year, capital expenditures are expected to decline 25.7% to $47.1 billion, the biggest drop since 2002. Gartner attributes the decline to economic conditions and overcapacity in the memory business. The capital intensity of the semiconductor industry has declined from 20% of revenues a decade ago to 15% today. In 2009, capital expenditures are forecasted to slip 12.8% to $41.1 billion, but in 2010, they are expected to grow 16.7% to $47.9 billion. From 2007 to 2012, the compound annual growth rate is forecasted to be -2.1%. Capital spending by foundries is forecasted to drop 29% in 2008 and 15% in 2009. There could also be fewer customers in coming years, as mergers and activities are expected to increase in the memory, fabless and consumer sectors.

Source: Electronic Engineering Times