After two years of belt-tightening, Korean chipmakers are now ready to invest. These producers of TFT-LCD and computer memory chips, among others, are planning to expand capital spending this year to consolidate a hard-fought technology leadership. These are aggressive moves, considering that competitors elsewhere are still tightening their purse strings on fears that capacity expansion might worsen supply gluts. Meanwhile, this gives hope to semiconductor equipment makers who suffered from steep declines in global capital spending on chip-making facilities in the last two years. In 2002, global semiconductor equipment makers felt the effects of the 2001 slump in demand for chips of all types. This was often referred to as the chip-making industry's worst disaster in history when global shipments fell 32 percent. The big drop came as global chip-makers deferred their capital outlays or pulled out of the chip-making business. The Korean equipment markets were no exception. As leading chipmakers such as Samsung Electronics and Hynix cut back on their spending, the market went down 36 percent from $2.2 billion in 2001 to $1.4 billion, according to the Semiconductor Equipment and Materials International, a global industry association of semiconductor equipment makers.
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