SEMI forecasts thateven though capital spending is expected to rise by 65 per cent in 2010, plansfor new fabs will remain on hold for next year In other words, don't expect anynew fabs that need to be equipped for next year. "The coming year appearsto be a year of recovery, but plans for new fabs remain on hold," saidChristian Gregor Dieseldorff, an analyst at SEMI, in a report.

"Mostcompanies will not invest in new facilities or significantly in new capacity in2010," he said. "Companies show more interest in investing inequipment used for technology upgrades."

In 2009, capitalspending is expected to hit Rs.72,449.88 crore ($15.5 billion), down 49.5 percent over last year, according to SEMI. In 2010, capital spending is expectedto hit Rs.1,20,126.58 crore ($25.7 billion), up 65.9 per cent, according to thefirm.

The largest sixspenders in 2010—dubbed "The Fantastic Six"—are Samsung, Intel, TSMC,Flash Alliance, GlobalFoundries and Inotera.

One year ago,"a total of 19 facilities (14 new fab constructions plus the continuationof five projects put on hold after the shell was built) were projected tocommence or resume in 2010," Dieseldorff said.

"As 2009 comesto an end, there have been no additional plans announcing new fab constructionprojects for 2010. We expect the five fab projects (only a shell exists)previously delayed due to market conditions to resume activity in 2010. Of the14 other fab projects, only one has a higher probability to begin constructionnext year," he said.

In fact, look formore fab closures. "Now at end of 2009, we know that a total of 49facilities have closed or will close by the end of 2010. This translates into adecline of 4 to 5 per cent in total installed capacity for 2009," he said."Looking to 2010, installed capacity is forecasted to grow by 4 to 5 percent compared to 2009. This trend, however, translates to no capacity growthfrom 2008 to 2010."

The net result? Thestrong fab tool vendors will get stronger. The weak will get acquired ordisappear.

Worldwide sales ofnew semiconductor equipment in 2009 will total Rs. 74,786.98 crore ($16.0billion), according to SEMI. Following a 31 per cent decline in 2008, theequipment sector will post a decline of 46 per cent in 2009. The figurerepresents the largest annual decline in equipment sales since the globalindustry association began its data collection programme in 1991.

However, SEMIexpects the market to bounce back in 2010 and grow approximately 53 per cent toRs. Rs.114,517.56 crore ($24.5 billion) and to further increase about 28 percent in 2011 to Rs.145,834.60 crore ($31.2 billion).