Worldwide semiconductor equipment spending is forecast to reach $40.3bn in 2008, a 9.9 per cent decrease from 2007, according to analyst firm Gartner.

The drop is predicted as the semiconductor industry remedies oversupply in the memory market.

"2007 was marked by continued strong DRam investments, shrugging off the realities of a market sector in oversupply, slower Nand spending growth, and disappointed hopes of a foundry spending revival," said Klaus Rinnen, managing vice president for Gartner's semiconductor manufacturing group.

"As we look to 2008, we expect the long overdue capital spending correction in the DRam market to push the capital equipment market into contraction.

"Adding on the downside is another slow year from foundry and a generally more cautious spending mood, with concerns about a US economic recession rising. "

Rinnen is expecting negative spending in 2008 across all major segments of the capital equipment market.

The quarterly picture for 2008 shows a weak first half of the year as DRam companies slow their capital investments to help get the supply demand picture under control.

"On the positive side, Nand Flash spending should continue to ramp," added Rinnen. "And a firming pricing picture for logic device segments brings manufacturers hope for some upside in capacity spending from this segment."