September 18, 2003 – Those anxiously awaiting a market turnaround may be disappointed by the latest semiconductor equipment figures from VLSI — and downright upset by VLSI’s chilly analysis of the numbers.

For chipmakers, the three-month book-to-bill ratio dipped to 1.08 in August, down slightly from July’s upwardly revised figure of 1.15, according to VLSI Research. A book-to-bill of 1.08 means that $108 in new orders was received for every $100 of product billed for the month. Worldwide bookings were at $12.18 billion, compared with July’s revised totals of $12.56 billion. Billings were at $11.08 billion, compared with $10.29 billion, which was also revised downward from earlier estimates. Capacity utilization was up to 85.5%, compared with 85.4% in July.

Worldwide manufacturers of semiconductor equipment posted a book-to-bill ratio of an even 1.00 in August, down slightly from 1.02 in July but still the second consecutive month above the parity level. Orders were at $2.11 billion and billings at $2.11 billion in August, down noticeably from July’s totals of $2.51 billion and $2.46 billion, and the lowest totals so far in 2003. Of the total billings, $1.13 billion were for wafer processing equipment, $544 million for test and related equipment, $143 million for assembly, and $294 million for service and spares. All sectors were down from July, ranging from 4-20%.

“With chipmakers reluctant to invest, the equipment industry is going nowhere,” stated VLSI. Without robust order activity, VLSI predicts “very little growth in equipment revenues for all of 2003.”

As a result, VLSI has adjusted its forecast for 2003. Equipment revenues are now projected to come in at $30.2 billion, a 4% reduction from earlier estimates, but still up slightly from 2002. IC billings, meanwhile, have been tracked up to $135.6 billion, more than 12% higher than 2002.