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Weakness in memory market to pull down semiconductor capital spending

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GARTNER says worldwide semiconductor capital spending will decline one percent in 2015, to US$63.9 billion.

Gartner had predicted a 2.5 percent growth in its second-quarter forecast. But its revised 2015 forecast reflects continuing weakness in end-user electronics demand, due to an uncertain economic spending.

Gartner also forecasts that 2016 will see a 3.3 percent decline over 2015. Memory continues to be the sector of concern: capital spending in memory in 2015 will decrease by US$0.8 billion, with growth for the year amounting to 0.2 percent.

As PC and ultramobile demands for memory slows, and new Samsung and SK Hynix foundries come online, there will be inventory oversupply. Gartner expect DRAM manufacturers to reduce their investment in new capacity and equipment in response.

The sluggish end-user electronics demand has led to leading semiconductor vendors also being cautious about their capital investments. Intel, for example, has announced that it is reducing its capital spending, as have foundry and semiconductor assembly and test providers and integrated device makers.