The market for chip equipment is expected to contract by almost 10 percent in 2008 largely due to lower spending from makers of computer memory, Gartner said Thursday.

The market researcher is forecasting chip equipment spending of $40.3bn (20.3bn) in 2008, down from an estimated $44.8bn this year.

SEMI, an industry association that comprises the world’s leading makers of chip-building machines, earlier this month forecast 2008 spending of $41.05bn. It has estimated 2007 sales at $41.7bn, though, making the drop less pronounced.

“We expect the long overdue capital spending correction in the DRAM market to push the capital equipment market into contraction,” Gartner analyst Klaus Rinnen said, referring to dynamic random access memory (DRAM) used in computers.

“Adding on the downside is another slow year from foundry and generally more cautious spending mood, with concerns about a US economic recession rising,” Rinnen added.

By contrast, makers of flash memory used in music players and of memory cards for digital cameras and mobile phones are expected to further boost their spending, Gartner said.

The world’s top chip-equipment makers include Applied Materials, ASML and Tokyo Electron.

In November, Applied Materials, the largest supplier of tools for making chips, reported a six percent drop in net income, matching a similar drop in revenue, for its fiscal fourth quarter that ended 28 October. It also gave a profit forecast for the current quarter far below Wall Street expectations.