The equipment industries are tightening their belts getting prepared for next year, as condition of the semiconductor markets tend to be changing despite a growing trend in recent years.
Equipment businesses like that of displays, especially Samsung Display, have been suffering from falling sales. As the demand for OLED panels from major smartphone consumers in North America decrease drastically early this year, Samsung Display is reducing investment on its facility investment, to avoid sliding over financial cliff.
Experts explain that although operation rate increased in the third quarter, but full recovery will take a much longer time compared last year. The schedule to launch operation of newly completed plant ‘A4’, is unknown. “We can only estimate the investment for new equipment after A4 is activated,” said a representative for the equipment industry.
Performance of major equipment partners like Semes, SFA, and AP System, are declining. The accumulated sales of this year have significantly dwindled, in contrast to the third quarter of last year. Toptec is experiencing the worst. Number of orders is shrinking recently as rumor has it, that Samsung Electronics attempts to leak 3D lamination equipment technology to China, for producing edge displays.
The semiconductor equipment industries are still striving. It is expected that PSK will be able to break its own performance record this year. As number of orders for test equipment from South Korean and foreign buyers increased, the overall sales for the third quarter built up by 113% compared to last year. Hanmi Semiconductor is also set to break its best performance record this year as a result of order expansion for back-end equipment.
However, next year’s industrial climate projected to be unfavorable. For memory, SK Hynix officially announced that it is going to reduce amount of investments by small scale next year. Samsung Electronics on the other hand delayed part of its investment into DRAM in Pyeongtaek. DRAM prices on a steady upward trend are now seen on a downhill, and the supply volume is shrinking.
Gary Dickerson, CEO of the world’s leader in materials engineering solutions Applied Materials, said in a conference held in Aug that, chip manufacturers might restrict facility investment and reduce procurement of manufacturing equipment. Morgan Stanley lowered the stock price of Applied Materials after validating the news. Goldman Sachs also announced a negative forecast for Applied Materials, Lam Research, and KLA Tencor.
Major semiconductor equipment manufacturers in Japan are making similar prediction. Tokyo Electron, Hitachi High Technologies, and Avantest called down their sales projection for next quarter recently. “This is caused by delay of planned investments in the semiconductor chip industries,” according to them.