Semi Capital Equipment Spending on Track for 10.2% Increase; Caution into FY12

Spending in the semiconductor capital equipment sector will increase 10.2 percent through 2011 to $44.8 billion, from $40.6 billion in 2010.

Cautioning, though, research firm Gartner (NYSE: IT) states that a looming semi industry correction, combined with an oversupply in foundry, will lead to a spending decline in 2012. Spending will drop 2.6 percent in 2012, and bounce back 8.9 percent in 2013.

Driving factors in 2011 include "aggressive foundry spending, integrated device manufacturer (IDM) logic capacity ramping-up at the leading edge, and memory companies gearing up for double patterning."

Worldwide packaging and assembly equipment (PAE) will see the smallest growth, at 3.6 percent, while semi capital spending will see an 11.9 percent jump.

Companies to watch on the data:

• Applied Materials Inc. (Nasdaq: AMAT);
  
• KLA-Tencor Corporation (Nasdaq: KLAC);
  
  
• Kulicke and Soffa Industries, Inc. (Nasdaq: KLIC);
  
  
• Lam Research Corp. (Nasdaq: LRCX); and
  
  
• ASML Holding N.V. (Nasdaq: ASML).

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