Worldwide semiconductor equipment sales are forecast to reach $21 billion in 2010 which is a more than 50 percent increase from US$14.1 billion in 2009.

While not directly affecting the semiconductor industry, sales of the gear are seen as a measuring stick of how the industry is doing. If companies are not going to buy gear to make chips they are not going to bother with any expansion plans.

According to SEMI, manufacturing capacity utilisation has improved, paving the way for a market recovery in 2010. Industry-wide wafer fab capacity utilization climbed to 77 per cent in the second quarter, up from 56 per cent in the first. Many indicators imply better conditions for both semiconductor and equipment companies, the outfit said.

SEMI expects chip fab spending, which already hit bottom in the second quarter of 2009, will manage sequential growth over the next few quarters. In the fourth quarter of 2010, the spending is expected to surpass the level seen in third-quarter 2008. SEMI earlier this month revised upward its fab spending forecast to 64 per cent for 2010, following a 50.7 per cent decline this year.