Global equipment demand not slowing down, says VLSI

July 20, 2004 – The latest snapshot of worldwide semiconductor equipment demand from VLSI comes with some new changes, but the story remains the same: sunny skies, and no clouds visible on the horizon.

Worldwide bookings of semiconductor equipment were $4.91 billion in June 2004, up 14.5% from $4.28 billion in May and 93% from June 2003’s total of $2.54 billion. June billings were $4.38 billion, compared with $3.94 billion in May and $2.59 billion a year ago. Of total billings, $2.39 billion were for wafer-processing equipment, $1.07 billion for test and related equipment, $312.5 million for assembly, and $607.1 million for service and spares. Sales of wafer-processing equipment were up 14% from May; test and assembly each rose 6% month-on-month.

The equipment book-to-bill ratio for June was 1.12, compared with 1.08 in May and 0.98 a year ago, for 11 consecutive months above parity. A book-to-bill ratio of 1.12 means that $112 worth of new orders was received for every $100 of product billed for the month.

VLSI noted that 2Q04 equipment revenues were higher than it originally expected; thus, it has boosted its growth forecast for the entire year to 68%.

Utilization levels slipped slightly in June after three months threatening the 100% mark, but remain at extremely high levels of 98%-99% for frontend, test, and assembly, and will remain above 95% through the second half of the year, predicts VLSI. Geographically, Japan’s equipment consumption climbed from 18.9% to 22.0%; China’s consumption dipped from 10.1% to 7.3%; and other regions saw slight increases. Starting with its June report, VLSI now breaks out monthly equipment consumption for China as a separate region; countries it tracked as “other Asia” now are included in “rest of world.”

Worldwide orders for ICs in June (a three-month average) were $16.91 billion, up from $16.22 billion in May (a 7% increase from earlier estimates) and $11.68 billion a year ago. Billings were $16.76 billion, up from $13.31 billion in May (bumped up 6% from projections) and 35% higher than June 2003. The IC B:B ratio was 1.15, compared with 1.12 in March and 1.10 in April 2003.

For July, VLSI projects equipment bookings and billings to slide to $4.78 billion and $4.23 billion, respectively, with a B:B of 1.13. Capacity utilization rates are expected to slip a notch to 98.5%-98.8%. For ICs, the firm predicts orders will rise 8% to $18.32 billion, while sales fall 17% to $13.86 billion, resulting in a B:B ratio of 1.23.


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