SAN JOSE, Calif. -- IC capital spending is expected to fall for the second consecutive year, but look for a ''turning point'' in expenditures sooner than later, according to IC Insights Inc.

Overall, IC Insights has lowered its IC capital spending forecast. It is projected that capital spending will hit $26.6 billion in 2009, down 39 percent over 2008. In 2008, capital spending reached $43.9 billion, down 28 percent over 2007, according to the research firm. In 2007, capital spending hit $60.9 billion, according to the research firm.

In January, IC Insights projected that capital spending would hit $32.4 billion in 2009, down 30 percent over 2008. Now, for the good news: ''IC Insights believes that the turning point in capital spending, on a quarterly basis, is expected to coincide with a firming of IC ASPs beginning in 2Q2009,'' according to the firm.

Spurred by pent-up electronic system demand and increasing average selling prices (ASPs), the IC market will register double-digit growth in 2010 and 2011 after beginning to recover in the second half of this year, according to market research firm IC Insights.

On a quarter-by-quarter basis, capital spending is projected to hit $5.8 billion in Q1 of 2009, $5.9 billion in Q2, $6.8 billion in Q3 and $8.1 billion in Q4, according to the firm.

Another positive trend: After a two-year, double-digit decline in capital spending, the following year showed a double-digit increase, according to recent trends. So for 2010, capital spending is projected to hit $30.6 billion, up 15 percent, the firm said.

The bad news: That's below the level in recent cycles, including 1999, when capital spending was $33.2 billion, it was noted.