10 Mar 2009

Semiconductor spend 'to halve in 2009'

Semiconductor capital equipment spending is set to halve over the next twelve months, potentially due to an increase in virtualisation and managed hosting.

Research by Gartner predicts this sector will contract by 45.2 per cent in 2009, reducing from $30.8 billion (£22.2 billion) the previous year.

It suggests there will be the beginning of recovery in 2010, with spending reaching $20.3 billion, up 20.1 per cent.

Klaus Rinnen, managing vice president for the researcher's semiconductor manufacturing group, claims there has been too high a level of spending on memory in the preceding last three years.

He states: "The dramatic crisis in world economics that came to light late in the third quarter and fully engulfed the fourth quarter of 2008 slowed capital spending in all segments of the semiconductor market."

Caron Alexander, head of technology for IT Assist, recently told Computer Weekly that companies should run a pilot scheme before deploying virtualisation fully.