Global semiconductor capital equipment spending fell 11.5 percent in 2013 to $33.8 billion, according to Gartner, Inc. While wafer-level manufacturing equipment demand performed better than market average, driven by lithography and associated processes, back-end manufacturing segments performed below average, significantly contributing to revenue declines, according to the report.
Wafer-level manufacturing outperformed the market in 2013, based on strength in dry etch, lithography, manufacturing automation and deposition with spending focused on upgrades and latest technology buys, said Gartner. There was little capacity expansion.
The report also finds that logic spending focused on preparing for 20 nanometer (nm)/14nm production with a few subsegments expanding, including steppers in lithography, non-tube chemical vapor deposition, conductor etch, rapid thermal processing and furnaces, and select process control segments.
All major categories in back-end segments declined significantly. "The fourth quarter of 2013 was particularly slow as major semiconductor assembly and test services (SATS) vendors pushed out orders due to market uncertainty," according to the report.
"With this as a backdrop, capital spending was muted and dominated by a few top players," said Klaus-Dieter Rinnen, managing vice president at Gartner, in a statement. "A revival of memory-related spending during the year was not enough to stem the decline in equipment sales. Despite increased foundry investments, logic-related spending was a dampening force. Consequently, manufacturing equipment sales saw slow, sequential quarterly growth, and a fourth-quarter sales explosion was not enough to stop the second straight year of decline."
Applied Materials maintained its No. 1 position based on its relative strength in deposition and etch, while the relative strength in lithography helped ASML hold on to its the No. 2 position. Lam Research and Tokyo Electron traded positions with LAM moving up one position to No. 3 thanks to its strong performance in etch and deposition. Tokyo Electron fell to No. 4 due to two key factors: a "significant decline in the yen-to-U.S.-dollar exchange rate, and unfavorable customer buying pattern," said Gartner.
A key finding indicates that the sales share of the top 10 vendors in 2013 was 70 percent, compared to 68 percent in 2012. Similarly, the top five vendors held almost 57 percent of the sales share, up five percentage points from 2012.
"The advance of these large players symbolizes losses of smaller players in the competitive race and an increasing market dependence on a few vendors in the equipment market," stated Rinnen.