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SINGAPORE: The semiconductor industry in Southeast Asia is expected to see as much as an eleven per cent drop in equipment spending in the coming year. This is because of slow consumer spending in the current weak market conditions.
However, industry watchers remain optimistic for the coming year. They said the semiconductor sector will be held up by industries involved in solar production and flash memory fabrications.
Singapore's solar sector had a shining time in 2007, with multi-million dollar deals coming from huge global players such as Oerlikon, Nor Sun and Renewable Energy Corp.
However, according to industry players, things this year may be less rosy. They said equipment spending in the semiconductor industry globally will dip by some 15 per cent to 20 per cent, with Southeast Asia taking an 11 per cent drop.
Still, they expect moderate revenues this year, after the record US$256 billion of sales posted by the semiconductor industry in 2007.
Ko Kheng Hwa, Managing Director, Economic Development Board, said: "Semiconductors and equipment sector will go through an exciting expansion phase in the coming years as we focus on chip design R&D, complex manufacturing and high-end services - plus the new growth that we are entering, for example, in solar energy, which will drive a lot of demand in the equipment sector."
According to industry watchers, another positive factor is that multi-national companies in the equipment sector are expanding in Asia to take advantage of opportunities here.
For example, global semiconductor manufacturer Kulicke and Soffa said some 90 per cent of its customers now come from Asia.
Industry sectors, such as photovoltaic technology used mainly in solar panels, are expected to push the market forward.
The photovoltaic space is predicted to grow 30 per cent to 40 per cent annually over the next two decades, according to the recently established Solar Energy Institute of Singapore. The industry boasted a turnover of US$2 billion last year.
Stanley Myers, CEO and President, SEMI, said: "Well, certainly, photovoltaic has a lot of hype built into it right now, so you got to come in and sort out the hype and look at the realistic situation. And realistically, the world is demanding more and more power."
The flash memory sector is also expected to add growth to the semiconductor industry going forward. However, some companies remain cautious and IM Flash said it will be holding some projects for the next 6 months until market conditions stabilise. - CNA/vm
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