Semiconductor capex will increase 2.9% in 2017, to $69.9 billion, says Gartner, after 5.1% growth in 2016.

The forecast to 2020 with the y-o-y growth rate is:

2016 $67.9 5.1%,
2017 $69.9 2.9%,
2018 $73.6 5.3%,
2019 $78.4 6.4%,
2020 $75.8 -3.3%.

“The stronger growth in 2016 was fuelled by Increased spending in late 2016 which can be attributed to a NAND flash shortage which was more severe in late 2016 and will persist though most of 2017. This is due to a better-than-expected market for smartphones, which is driving an upgrade of NAND spending in our latest forecast,” says Gartner’s David Christensen, “NAND spending increased by $3.1 billion in 2016 and several related wafer fab equipment segments showed stronger growth than our previous forecast. The thermal, track and implant segments in 2017 are expected to increase 2.5 percent, 5.6 percent and 8.4 percent, respectively.

Compared with early 2016, the semiconductor outlook has improved, particularly in memory, due to stronger pricing. An earlier-than-anticipated recovery in memory should lead to growth in 2017 and be slightly enhanced by changes in key applications.

Foundries continue to outgrow the overall semiconductor market with mobile processors from Apple, Qualcomm, MediaTek and HiSilicon as the demand driver on leading-node wafers. In particular, fast 4G migration and more-powerful processors have resulted in larger die sizes than previous-generation application processors, requiring more 28 nanometer (nm), 16/14 nm and 10 nm wafers from foundries.

Non-leading technology will continue to be strong from the integrated display driver controllers and fingerprint ID chips and active-matrix organic light-emitting diode (AMOLED) display driver integrated circuits (ICs).