Global equipment demand tails off, says VLSI

March 17, 2004 – Worldwide orders and sales of semiconductor equipment exceeded expectations in February 2004 but were below January’s levels, according to VLSI Research.

Equipment manufacturers posted bookings of $3.41 billion and billings of $3.32 billion in February, compared with January’s upwardly revised levels of $3.78 billion and $3.38 billion. Of total billings, $1.53 billion were for wafer-processing equipment, $711 million for test and related equipment, $242 million for assembly, and $374 million for service and spares. A 6% decrease in sales of wafer processing equipment was enough to drag down the entire segment, despite slight gains in assembly and service and spares.

February’s book-to-bill ratio was 1.03, down from 1.12 in January, but up from 0.98 a year ago, and the sixth consecutive month above parity. A book-to-bill ratio of 1.03 means that $103 worth of new orders was received for every $100 of product billed for the month. Capacity utilization levels remained at 86%-90%, up five to eight points from February 2003.

Most regions maintained their share of overall consumption, with Taiwan and “other Asia” (including China) losing and gaining a couple of points, respectively. The top two regions, Japan and other Asia, now account for more than 53% of the world’s consumption.

For ICs, the three-month average of worldwide orders and sales underperformed for the second month in a row: $14.23 billion with billings of $11.78 billion, compared with January’s downwardly revised results of $16.19 billion and $11.44 billion. The three-month IC B:B ratio slipped to 1.13 from 1.24 in January, but above the 0.96 during same period last year.

Looking ahead to March, VLSI is predicting equipment bookings of $4.87 billion and billings of $4.56 billion — month-to-month increases of 43% and 37% — with a B:B ratio of 1.07, and an uptick in overall capacity utilization rates to 89%-93%. For ICs, the firm expects orders and sales of $14.49 billion and $14.81 billion, with a B:B of 1.14.


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