Semiconductor sales, but the companies that help keep the chip manufacturing plants humming won't be as busy for the rest of the year, according to a new report by technology research firm Gartner. Semiconductor capital equipment sales are expected to fall off about 12 percent in 2005 with sales of $33.1 billion, and decline again in 2006 before returning to positive growth in 2007. Analysts are calling the trend a "mild downturn."
Last year, equipment sales surged to keep up with demand for home networking equipment, automotive applications such as telemetry services, flat-panel televisions, national security measures, nanotechnology and radio frequency identification (RFID) tags. But Gartner says production capacity has now exceeded demand, and companies are beginning to settle down with longer-term growth trends for the industry. Companies such as Applied Materials, Credence Systems, Lam Research, Mattson Technology and Novellus Systems are expected to feel the brunt of the downturn.