Semiconductor capital spending is estimated to dip 4.7 percent to $59.4 billion in 2016, according to market research firm Gartner.
Gartner also predicts 7.2 percent growth in 2017 and 8.7 percent increase in 2018 in Semiconductor capital spending.
The 2016 outlook for the semiconductor manufacturing equipment market reflects a bleaker outlook for end-user electronics demand and the world economic environment.
“Capital investment policies of leading semiconductor vendors have remained cautious against the background of sluggish electronics demand. However, the long-term outlook shows a return to growth, although the wafer-level manufacturing equipment market is expected to enter a gentle down cycle in 2016 due to the loss of the supply and demand balance in the DRAM market,” said David Christensen, senior research analyst at Gartner.
Spending on wafer-level manufacturing equipment is forecast to decline 2.4 percent in 2016. The lithography segment will grow 1.4 percent, while the clean and planarization equipment markets are expected to decline by 2.9 percent.
The deposition equipment segment will decline 3.2 percent. Beyond 2016, the market turns positive, with relatively strong growth forecast through 2018, said Gartner.