May. 10, 2023 /SemiMedia/ -- According to a report recently released by Yole, the total market value of the wafer manufacturing equipment industry is expected to be $87 billion in 2023, and will stabilize in the future and reach $107 billion in 2028, with a compound annual growth rate of 4.3%.

According to the report, the market has entered a period of equipment capacity digestion after setting records for semiconductor fab equipment revenue for three consecutive years. A slight decline in fab equipment revenue in Q4 2022, down 1% sequentially, led to a weak Q1 2023, down 26% sequentially, marking a decline in Q1 2023.

According to Dr. Taguhi Yeghoyan, an analyst at Yole Intelligence, the expected revenue of the wafer equipment factory in the first quarter of 2023 is 20 billion US dollars, which is similar to the revenue in the fourth quarter of 2020. Despite long equipment lead times and high factory utilization, the decline was largely due to delays or even cancellations of orders by memory chip makers. Manufacturers of DRAM and NAND memory such as Samsung, Micron, SK Hynix, and Kioxia are cutting capital expenditures, canceling or delaying orders.

Overall, revenues for equipment suppliers could fall by as much as 13% year-over-year to $87 billion in 2023. In addition, the geopolitical situation has brought additional headwinds to equipment suppliers in the United States, Europe, and Japan, causing them to lose some regional revenue.

Service and support-based revenue, on the other hand, is growing steadily at 1% year-over-year, and the customer base is growing at 7% year-over-year.