Semiconductor Companies Begin Looking to the FutureESG NavigatorsJuly 2009There has been a subtle shift away from simply surviving toward planning for the recovery and the future.Test and assembly business is usually a leading indicator of recovery followed by CAPEX. R&Ds position in the recovery cycle is highly dependent on the individual company, but when done in mass it usually indicates that business is ready to invest in the future.EE Times reports that analysis of the semiconductor packaging, assembly and test (SATS) sector by Gartner suggests that the SATS market seems to have bottomed out sooner than previously predicted and that a market inflection point was reached in the first quarter of 2009.A separate Gartner report also suggests capital spending on semiconductor equipment should bottom out this year and start growing again next year.The analyst firm expects worldwide semiconductor capital spending to reach $24.3 billion for all of 2009, a 44.8 percent drop from the estimated $44.0 billion spent in 2008. Spending should rise 20.9 percent in 2010 to reach $29.4 billion.Senior management seems to have settled down and is more comfortable opening the purse on the development side.We have seen some companies hold onto their R&D budgets through the recession making the percent of revenue soar, according to Bert Bruggeman, VP of operations for Silicon Valley Technology Center, providing customers a cost-effective way to develop technologies and accelerate their product's time to market. Overall R&D investment today seems to have stabilized and begun to ease upward as companies start to look to the future.We will know the recovery is in full swing when investors and semiconductor companies rally around the next wave of industry-changing technology. Bruggeman identified three key areas the first two are emerging as new drivers for the technology industry.•Alternative energy technologies, including solar and smart grids that create new energies without being wasteful.•Bio science applications for better disease detection and treatment. People want to live healthier.•The next ambient intelligence. The next iPhone consumer application.The economy is clearly not yet in a recovery period. However, the slide seems to have slowed and semiconductor companies may be looking up toward the horizon for the first time in many months.
Semiconductor Companies Begin Looking to the Future
ESG Navigators
July 2009
There has been a subtle shift away from simply surviving toward planning for the recovery and the future.
Test and assembly business is usually a leading indicator of recovery followed by CAPEX. R&Ds position in
the recovery cycle is highly dependent on the individual company, but when done in mass it usually indicates
that business is ready to invest in the future.
EE Times reports that analysis of the semiconductor packaging, assembly and test (SATS) sector by Gartner
suggests that the SATS market seems to have bottomed out sooner than previously predicted and that a
market inflection point was reached in the first quarter of 2009.
A separate Gartner report also suggests capital spending on semiconductor equipment should bottom out this
year and start growing again next year.
The analyst firm expects worldwide semiconductor capital spending to reach $24.3 billion for all of 2009, a 44.8
percent drop from the estimated $44.0 billion spent in 2008. Spending should rise 20.9 percent in 2010 to reach
$29.4 billion.
Senior management seems to have settled down and is more comfortable opening the purse on the
development side.
We have seen some companies hold onto their R&D budgets through the recession making the percent of revenue soar, according to Bert Bruggeman, VP of operations for Silicon Valley Technology Center, providing customers a cost-effective way to develop technologies and accelerate their product's time to market. Overall R&D investment today seems to have stabilized and begun to ease upward as companies start to look to the future.
We will know the recovery is in full swing when investors and semiconductor companies rally around the next wave of industry-changing technology. Bruggeman identified three key areas the first two are emerging as new drivers for the technology industry.
•Alternative energy technologies, including solar and smart grids that create new energies without being wasteful.
•Bio science applications for better disease detection and treatment. People want to live healthier.
•The next ambient intelligence. The next iPhone consumer application.
The economy is clearly not yet in a recovery period. However, the slide seems to have slowed and semiconductor companies may be looking up toward the horizon for the first time in many months.
