Chip Equipment Industry Told To Adapt To Smaller Sales Gains In Maturing Field.(INTERNET & TECHNOLOGY)

Byline: JAMES DETAR

The semiconductor industry is no longer a kid. As it matures, its sales pace is slowing, a fact of life that chipmakers and chip equipment firms must face.

The number of chips sold could reach a record high this year, but prices are likely to stay depressed. So, chipmakers might not have much to spend on new gear.

"The unit volume shipments are nearing the level we saw at the peak of the last cycle," said Stanley Myers, chief executive of the Semiconductor Equipment & Materials International trade group. "But the rebound in revenue is not strong."

One problem is there's still a lot of unused chip factory space. As chip unit sales pick up though, supply is starting to level out. Merrill Lynch analyst Joseph Osha says this will benefit gear makers.

"Semiconductor equipment companies are in general benefiting from a clear pick-up in order activity," especially in Japan and other parts of Asia, Osha wrote in a report released Wednesday.

No Big Reversal, Yet