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Trade group predicts rise in chipmaking equipment

A trade organization says there is growing optimism in the chip production equipment sector, usually an indication of positive trends for chipmakers.

A trade organization says that there is growing optimism in the chip production equipment sector, usually an indication of positive trends for chipmakers.

Semicondutor Equipment and Material International (SEMI) says that a consensus forecast of chip production equipment manufacturers predicts that the industry will grow 9 percent in 1999 over the previous year reaching $23.8 billion.

SEMI said respondents represent about 80 percent of the total sales volume for the global semiconductor equipment industry.

This forecast is up from the November 1998 survey, which only projected a 6.7 percent improvement for the year, SEMI said.

Growing orders for chipmaking equipment typically indicate a bullish attitude among chipmakers about future business as they buy more equipment for adding capacity at plants.

The trade organization said this sanguine outlook carries over into 2000 and 2001 also, with annual increases of 18.3 and 21.8 percent forecast respectively.

A flurry of activity among chipmakers also highlights the increasing importance of the chip equipment and materials sector. Intel said in May that it had invested $15 million in a leading chip equipment maker as it eyes future generations of super-fast processors. Intel invested in Silicon Valley Group which makes equipment for processing wafers, a basic building block of a chip.

Also, IBM announced today that is working with Photronics, a chip materials supplier, to design next-generation chips for low-cost computing devices.

Some of the highlights of the SEMI forecast are:

• Sales of wafer process equipment should rise to $15.6 billion in 1999, 9.8 percent above the $14.2 billion in sales posted in 1998.

• Sales of assembly and packaging equipment are expected to increase to $1.7 billion, up 13.3 percent from $1.5 billion in sales in 1998.

• Test equipment sales should reach $4.6 billion, up 4.2 percent from $4.4 billion in 1998.