Business Editors

SAN JOSE, Calif.--(BUSINESS WIRE)--April 8, 2003

In 2002, for the second consecutive year, worldwide semiconductor manufacturing equipment sales declined by more than 30 percent, according to Gartner, Inc. (NYSE: IT and ITB).

Worldwide semiconductor manufacturing equipment sales (excluding test equipment) totaled $18.5 billion in 2002, a decline of 30.4 percent from 2001.

"The dire outcome of 2002 was the result of slower-than-anticipated end-user demand and an increasing level of macroeconomic uncertainty that hit semiconductor vendors rapidly in the second half of 2002," said Klaus-Dieter Rinnen, vice president for Gartner's semiconductor research group. "Consequently, spending plans were adjusted downward, projects were delayed or shelved, and equipment orders were either pushed out or cancelled."

The market was kinder to companies in hot technology segments such as lithography and photomask, copper interconnect, factory automation, contact probe, flip chip, and interconnect bonding in general. Companies more strongly dependent on capacity buys and Greenfield activity were more negatively affected.

All major segments were effected in 2002 by the industry decline. Electrochemical deposition (ECD) and low-density plasma deposition fared better than most segments, only declining 11.2 percent and 8.1 percent, respectively.

"Some small emerging technologies such as atomic layer deposition (ALD), which grew 53.2 percent, and silicon germanium epitaxy, which increased 55 percent, grew above the marketplace as these new technologies are beginning to emerge from R&D and move into production," Rinnen said.

High-current implanter with the emergence of advanced transistors and silicon-on-insulator (SOI) technology declined 22 percent year over year. High-voltage implant, on the strength of the memory market, only declined 19.3 percent. "Segments associated with factory automation also saw above-market growth as 300 mm fabs and advanced automation at leading-edge fabs continued to implement advanced automation technology, resulting in only a 26 percent decline in this segment," Rinnen said.

The market continues to be led by the wafer fab equipment market. Worldwide wafer fab equipment sales totaled $16.53 billion, which represented 89.1 percent of all semiconductor manufacturing equipment sales in 2002. Wafer fab equipment sales declined 31.6 percent in 2002.

Packaging and assembly equipment sales totaled $2.34 billion in 2002, a 21.7 percent decline from 2001 sales. Wire bonders continued to be the largest equipment segment for semiconductor packaging, accounting for almost 16 percent of the identified packaging equipment market.

Gartner statistics were based on using SAB 101 revenue in accordance with changes in accounting policy mandated by the Securities and Exchange Commission. These changes primarily affect companies publicly traded on U.S. stock exchanges, but SAB 101 policies have been adopted by a few other companies as well.

Gartner is releasing a series of Alerts providing 2002 market share results for the semiconductor electronics and manufacturing industry. Additional information on semiconductor manufacturing equipment sales is available in the Gartner Dataquest Alert "Semiconductor Manufacturing Equipment Sales Contract in 2002." This Alert provides preliminary rankings for the top 20 companies worldwide.

This research is produced by Gartner's Semiconductor Electronics and Manufacturing Services Worldwide group. More information on this group can be found in the Gartner Semiconductor Focus Area at http://www.gartner.com/1_researchanalysis/focus/semimkt_fa.html. To subscribe to this service, please call 408-468-8000. Reports can be purchased on the Internet at www.gartner.com.

Gartner, Inc. is a research and advisory firm that helps more than 10,500 clients leverage technology to achieve business success. Gartner's businesses consist of Research, Consulting, Measurement, Events and Executive Programs. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has 4,000 associates, including more than 1,000 research analysts and consultants, in more than 75 locations worldwide. Fiscal 2002 revenue totaled $907 million. For more information, visit www.gartner.com.