Leading chip-equipment makers like Applied Materials, Tokyo Electron and KLA-Tencor continued to struggle in 2013 as chipmakers became even more selective and conservative with their manufacturing equipment investments.
For the year, worldwide semiconductor-equipment sales fell 11.5 percent to $33.8 billion. The lackluster performance comes on the heels of an even worse 2012 when total sales plunged 16.1 percent to $37.8 billion, according to Gartner.
"A revival of memory-related spending during the year was not enough to stem the decline in equipment sales," Klaus-Dieter Rinnen, a managing vice president at Gartner, said in the report. "Despite increased foundry investments, logic-related spending was a dampening force. Consequently, manufacturing equipment sales saw slow, sequential quarterly growth, and a fourth-quarter sales explosion was not enough to stop the second straight year of decline."
Applied Materials held on to the top spot among its peers, checking in with total sales of $5.46 billion last year and 16.2 percent market share, followed by ASML (15.7 percent) and Lam Research (9.4 percent).
However, Applied's full-year sales were off 1 percent – a troubling development that surely played no small role in the company's executive reshuffling in August.
While most chip-equipment vendors were still hamstrung by glutted – though improving – semiconductor inventory surpluses, a couple companies managed to buck the trend and generate some serious growth last year.
Lam Research increased total sales by 12.7 percent to $3.16 billion, pushing it into the top three in worldwide chip-equipment market share while ASML solidified its hold on the No. 2 spot by increasing revenue 8.5 percent amid the overall malaise to $5.3 billion.
Gartner said that wafer-level manufacturing outperformed the market last year, mainly on the strength of dry etch, lithography, manufacturing automation and deposition. Logic spending focused primarily on preparing for 20nm/14nm production. More troubling, only a few subsector categories – steppers in lithography, nontube chemical vapor deposition, conductor etch and rapid thermal processing and furnaces – managed to garner any significant growth in 2013.
"In the back-end segments, all major categories experience significant declines," the report said. "The fourth quarter of 2013 was particularly slow as major semiconductor assembly and test services (SATS) vendors pushed out orders due to market uncertainty."