June 16, 2004 – Demand fell for the second consecutive month in May, but an increase in shipments kept alive a nine-month streak of parity levels, according to the latest data from VLSI Research.
Worldwide orders for ICs were $15.90 billion in Nay, up from $15.16 billion in April and $10.79 billion a year ago. Sales of $13.31 billion were up less than 2% month-on-month, and about 32% year-on-year. The IC book-to-bill ratio was 1.12, compared with 1.07 in March and 1.02 in April 2003.
Utilization levels remain just a hair below the maximum: 99.7% for frontend, 97.8% for test, and 99.2% for assembly, all roughly even with April’s levels. By region, equipment consumption was roughly the same as the prior month, with a slight dip in Korea offset by an increase in “other Asia.”
Worldwide bookings of semiconductor equipment were $4.28 billion, down from $4.35 in April but nearly double the $2.17 billion reported in May 2003. Billings were $3.94 billion, up 4% from April’s totals and an increase of 73% from a year ago. April’s final bookings and billings were upwardly revised by 5.1-8.5% from earlier estimates. Sales of wafer processing equipment were down a fraction from April, while test and related equipment were up 25%.
The equipment B:B ratio for May was 1.09, compared with 1.15 in April (four points higher than initial estimates) and 0.95 a year ago, and the ninth consecutive month above parity. A book-to-bill ratio of 1.09 means that $109 worth of new orders was received for every $100 of product billed for the month.
“What occurred in May is very typical of the industry this time of the year and is nothing to worry about,” stated VLSI. In fact, “the industry is growing fast enough that 2Q04 will not be pulled down by the end of the Japanese fiscal year…this is pushing the annual growth for 2004 at 66.5%.”
For the half-year point of June 2004, VLSI projects IC bookings of $16.78 billion and billings of $16.08 billion, with the B:B ratio rising to 1.18. Capacity utilization rates are expected to slip a notch to 98.5%-98.8%. For equipment, the firm predicts a pickup in orders to $4.97 billion with a comparable increase in sales to $4.44 billion, for a B:B of 1.12.