The worldwide semiconductor equipment market will register about flat growth in 2016, but is expected to rebound in 2017, according to SEMI.

The total semiconductor equipment market will grow 1% to US$36.9 billion in 2016 after contracting 3% in 2015. An increase of 11% is expected in 2017 for the market to reach US$41.1 billion, SEMI said.

Equipment spending had a slow start in the beginning of 2016, but is expected to accelerate in the second half of the year, SEMI indicated. Spending growth will continue into 2017 driven by foundries, memory (both 3D NAND and DRAM), MPU, power, and investments in China.

Front-end wafer processing equipment is forecast to grow 2% in 2016 to total US$29.3 billion, up from US$28.8 billion in 2015, SEMI said. The test equipment segment is expected to total US$3.4 billion, essentially flat when compared to last year. Assembly and packaging equipment, and other front-end equipment are forecast to contract in 2016 falling to US$2.4 billion (-5%) and US$1.9 billion (-2%), respectively.

"After a tepid 2015, device manufacturers are beginning to ramp their investments in key industry segments," said Denny McGuirk, president and CEO of SEMI. "We expect capital spending to improve for the remainder of 2016 and into 2017."

Taiwan is forecast to continue as the world's largest spender with US$9.5 billion estimated for 2016 and US$10.0 billion for 2017, SEMI said. In 2016, China is projected to be the second largest spender at US$6.4 billion, followed by Korea at US$6.2 billion. For 2017, Taiwan is projected to maintain its leading position while the market in Korea will nudge past the market in China.

In 2016, year-over-year increases are expected to be largest for Rest of World (59%), China (31%), and Europe (6%). Projected year-over-year percentage increases for 2017 are forecast to be largest for Korea (30%), Europe (19%), RoW (18%) and China (13%).