The semiconductor equipment market touched approximately $41 billion in revenue in 2010, growing at 143 percent, according to Gartner (News - Alert). Market recovery from the industry slowdown of the previous two years fueled the growth.

All major market segments grew significantly in 2010 with automatic test equipment (ATE) sales showing an increase of 149 percent, wafer fab equipment (WFE) sales registering 145 percent growth and sales of packaging assembly equipment (PAE) going up by 127 percent.

“The semiconductor equipment market soared in 2010. Driven by the pent-up demand from the 2008 and 2009 downturn, and a stronger economy than projected, 2010 just kept getting better and better,” said Klaus Rinnen, managing vice president at Gartner, in a statement. “Memory and foundry spending were the key drivers, although all areas showed significant growth.”

The recent earthquake and tsunami in Japan will have a short-term impact on the industry. As a result, according to Gartner, revenue in the second quarter of 2011 can be depressing. However, semiconductor equipment manufacturers should be able to recover in the second half of the year.

The year 2010 witnessed a number of changes in the top 10 semiconductor capital equipment companies. The share of the top 10 semiconductor capital equipment companies rose nearly 2 points in 2010, accounting for 63.4 percent of total revenue, up from 61.6 percent in 2009, Gartner said in its report.

Applied Materials (News - Alert) retained the No. 1 position in the market without increasing its market share. ASML was the fastest-growing company among the top 10 semiconductor capital equipment vendors in 2010. The company moved from No. 3 to No. 2 based on the strength of immersion lithography for double patterning.

Meanwhile, the global semiconductor market grew by 25 percent in 2010 compared to 2009 with revenues of $43.55 billion, according to a Semiconductor Equipment and Materials International (SEMI) report.