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Gartner forecasts that global semiconductor capital spending will rise 2.9% in 2017 to reach $69.9 billion. This expected increase follows a stronger 5.1% growth in 2016, though the 2017 projection reflects a moderation from last year’s pace.
David Christensen, senior research analyst at Gartner, explained that the stronger growth in 2016 was driven by increased spending late in the year as the industry responded to a severe NAND flash shortage. That shortage remained significant into late 2016 and was expected to persist through much of 2017. A better-than-anticipated smartphone market is also prompting higher-than-expected NAND investment in Gartner’s updated forecast.
In 2016, NAND-related spending rose by about $3.1 billion, and several wafer fabrication equipment segments outperformed earlier forecasts. Gartner expects specific equipment markets—thermal processing, track systems, and ion implant—to grow by roughly 2.5%, 5.6%, and 8.4% respectively in 2017.
Foundries are continuing to outpace the broader semiconductor market. Demand for advanced mobile processors from companies such as Apple, Qualcomm, MediaTek, and HiSilicon is a primary driver, particularly for leading-node wafers. Rapid 4G adoption and increasingly powerful processors have increased die sizes for current-generation application processors, creating greater demand for 28 nm, 16/14 nm and 10 nm wafers at foundry facilities.
Non-leading-edge technologies are expected to remain robust as well. Components such as integrated display driver controllers, fingerprint identification chips, and display driver ICs for active-matrix organic light-emitting diode (AMOLED) panels are supporting demand outside the most advanced process nodes.
Overall, Gartner notes that the semiconductor outlook has improved since early 2016. Memory markets in particular have recovered sooner than many anticipated, driven by stronger pricing and a healthier smartphone market. This earlier-than-expected rebound in memory should support industry growth in 2017 and be marginally amplified by shifting demand across key applications.