VLSI: March peaks unequaled, but yearly growth strong

May 19, 2004 – Global demand for semiconductor equipment in April 2004 couldn’t keep up with the big numbers posted in March, but still maintained solid year-on-year gains, according to VLSI Research.

Worldwide bookings of semiconductor equipment in April were $4.01 billion, compared with $5.34 billion in March and $2.23 billion in April 2003. March orders were revised upward by 8% from initial calculations. Billings were $3.60 billion, down 30% from $5.16 billion in March (also upwardly revised) but up 56% year-on-year. Of total billings, $2.07 billion were for wafer-processing equipment, $839.1 million for test and related equipment, $228.6 million for assembly, and $463.4 million for service and spares. After big month-on-month gains in March, every category was down 28%-33%–in its final March calculations, VLSI added double-digit increases for every sector except assembly equipment. Year-on-year, growth was strongest in wafer processing equipment (78%) and test (51%).

The equipment book-to-bill ratio for April was 1.11, up from 1.03 in March (down from initially-reported 1.08) and 0.97 a year ago, and the eighth consecutive month above parity. A book-to-bill ratio of 1.11 means that $111 worth of new orders was received for every $100 of product billed for the month. Capacity utilization levels slid back a couple of points to 87%-89%.

For ICs, demand also deflated from March’s high levels, as worldwide orders (a three-month average) fell 7.5% to $15.21 billion–well below VLSI’s optimistic prediction of $17.23 billion–while sales dropped from $16.20 billion to $12.96 billion. Year-on-year performance was still strong, however, with gains in orders and sales of 45% and 39%, respectively. The IC B:B ratio was 1.08, compared with 1.21 in March and 1.01 in April 2003. Geographically, Japan’s consumption continued to slide, down from 19% in March to 20% in April, while all other geographic markets picked up a few points each.

For May, VLSI projects equipment bookings of $3.74 billion and billings of $3.57 billion, with a B:B ratio of 1.05, and capacity utilization rates continuing to fall back to 85-88%. For ICs, the firm predicts $14.43 billion in orders and sales of $13.12 billion, and a B:B of 1.02.


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