March 2, 2004 – Demand for Japanese-made semiconductor equipment continues to be led by backend operations, but signs of a shift may be starting to appear, according to the latest figures from the Semiconductor Equipment Association of Japan (SEAJ).

Worldwide orders for Japanese-made semiconductor equipment were 138.28 billion yen ($1.26 billion), a slight increase from December and up 113% from January 2003. This marks seven straight months of sequential growth, and eighth months of year-on-year gains — four in a row with more than 100% year-on-year increases. Domestic equipment orders in January were 60.87 billion yen ($555.3 million), down 14% sequentially but up 54% from a year ago.

Backend demand continued to pull the Japanese equipment market, even with slower demand in other categories. A dropoff in worldwide orders for all other equipment (mask/reticles, wafer manufacturing, wafer processing, and assembly) was countered by a 43% increase in test/inspection equipment, which accounted for one-third of total worldwide equipment orders, up from the mid-teens to low-20s throughout the past year. Domestically, a 23% dropoff in test equipment orders led to an overall 14% slide in sequential bookings. Nevertheless, combined test and assembly orders are showing strong gains of more than 135% (worldwide) and 44% (domestic) compared with January 2003.

Worldwide sales of Japanese semiconductor equipment were 103.62 billion yen ($945.3 million), down 8.1% from December (largely due to a 64% drop in test equipment sales) but up 85% from a year ago. Sales of test equipment were off by 36% sequentially, but a 7% increase in wafer processing helped soften the blow. Domestic sales were 70.67 billion yen ($644.7 million), up 35% from December and 90% from a year ago, the biggest year-on-year gain in 12 months. Again, test equipment sales were down by 17%, but a surprising 64% jump in processing equipment to 54.22 billion yen ($494.6 million) — more than three-quarters of equipment sold — more than made up for it.

January’s worldwide book-to-bill ratio (a three month average) was 1.38, down from 1.62 in December but up from 1.05 in January 2003, and the ninth consecutive month above parity. A book-to-bill of 1.38 means that $138 in new orders was received for every $100 of product billed for the month. Domestically the B:B was 1.17, compared with 1.43 in December and 0.96 a year ago, marking the fourth straight month of parity and 10 of the last 13 months.