Chip gear sales now expected to shrink

[RuffRyders]

[b]Chip gear sales now expected to shrink[/b]
[i]Global sales of chip equipment are expected to fall 5.2 percent next year, an industry group said Wednesday in a sharp reversal of its midyear forecast of 24 percent growth.[/i]

Sales of equipment used to make and test chips are likely to total $33.49 billion next year, down from an estimate for 2004 sales of $35.31 billion, according to the Semiconductor Equipment and Materials International (SEMI).

"Our member sentiment has changed significantly in the past five months--since we last conducted the survey--and visibility has really diminished," SEMI Chief Executive Stanley Myers said.

But he added that the forecast sales for 2005 will still be the third-largest on record despite the expected contraction.

Demand for chip equipment has faltered in recent months after slower-than-expected sales of electronics products such as flat-screen TVs prompted consumer electronics makers and chipmakers to trim inventories and hold back fresh investment.

SEMI said chip equipment demand is expected to be back on a growth path in 2006, expanding 3.07 percent to $34.52 billion and then growing 14.76 percent to $39.61 billion in 2007.

By region, only China and North America are expected to post sales growth in 2005, while Japan is projected to experience a 13.7 percent sales decline to $6.79 billion. That would still make Japan the world's largest chip equipment market.

[size=1]Story Copyright © 2004 Reuters Limited. All rights reserved. [/size]

[url=\"http://news.com.com/Chip+gear+sales+now+expected+to+shrink/2100-1006_3-5472446.html\"][Source][/url]