March 18, 2004 – The semiconductor equipment industry “clearly outpaced” the chip sector in 2H03, with nearly 2x the bookings and 3%-4% better revenue growth, according to VLSI.

Equipment bookings have been sliding since a $4.7 billion peak in December, possibly indicating that “chipmakers have pulled in spending into the current quarters with not much more left in their budget for the rest of 2004,” according to VLSI. Such planning would result in two scenarios: “the super-heated repeat of 2000 with equipment growth hitting close to 80%,” or a “2002-like second half crash.”

VLSI predicts that 2003’s “excess exuberance” will lead to continued slides in 1H04, and flat revenue growth in the second half of the year.