Big G is warning that worldwide wafer fab equipment spending is on pace to total $33 billion in 2012 which is a decline of 8.9 percent from 2011.

Gartner analysts warned that this is a sign of an industry in downturn and said the market will return to growth in 2013 with WFE spending projected to surpass $35.4 billion, a 7.4 percent increase from 2012. Bob Johnson, research vice president at Gartner said 2012 spending was strong at the beginning of the year, as foundries and other logic manufacturers ramped up sub-30-nm production.

The need for new equipment was stronger than originally anticipated, because strengthening demand for leading-edge devices required higher production volumes as yields had yet to reach mature levels. However, demand for new logic production equipment will soften as yields improve, leading to declining shipment volume for the rest of the year, he said.