Some 17 chip makers are expected to join the $1 billion club in terms of semiconductor capital spending in 2006, according to market researcher Gartner.

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In total, capital spending is expected to hit $55.5 billion in 2006, up 17 percent over 2005, according to the firm. Wafer fab equipment is expected to jump 25 percent in 2006.

Market researcher IC Insights has also increased its semiconductor capital spending forecast for 2006. Worldwide capital spending is expected to hit $51.3 billion in 2006, up 12 percent over 2005. However on a quarter-by-quarter basis, capital spending is expected to decelerate. Capital spending is projected to grow 8 percent in Q1 to $11.7 billion, 7 percent in Q2 to $12.5 billion, 6 percent in Q3 to $13.3 billion and 4 percent in Q4 to $13.8 billion.

IC Insights does not change its overall semiconductor forecast, which calls for 8 to 10 percent growth in 2006. And according to Reuters, Gartner projected the IC industry to grow 10.6 percent in 2006 over 2005. Chip sales will grow 14 percent in 2008, before falling to less than 1 percent growth in 2009. Gartner analyst Jim Tully said 35 percent of existing chip makers — about 350 companies — will be driven out of business or acquired by larger rivals.