SEAJ: May delivered a mixed bag to chip equipment firms

June 6, 2004 – Japanese manufacturers of semiconductor equipment saw mixed results in May 2004, as slowing domestic demand was countered by a pickup overseas, according to the Semiconductor Equipment Association of Japan (SEAJ).

For the third straight month, worldwide orders for Japanese-made semiconductor equipment were basically flat at 154.31 billion yen ($1.42 billion), but increased 56.1% compared with May 2003 — the tenth straight month of year-on-year gains. Domestic equipment order growth in May increased just 1% from April to 72.36 billion yen ($664.9 million), with slightly better growth of 8.1% from a year ago, after enjoying 40%-50% year-on-year gains through the first five months of the year.

Strong year-on-year growth was seen for wafer processing (152%), assembly (182%), and test/inspection (190%) equipment; even wafer manufacturing rocketed to a one-year high. Increased demand was attributed to Taiwanese chipmakers bringing new capacity online, and a recovering US market. Domestic orders were slower, with a nearly twofold increase in inspection equipment mostly offset by flat or negative growth in other equipment categories.

Worldwide billings of Japanese chipmaking equipment were up 7.4% in May to 124.65 billion yen ($1.14 billion), a 160% increase from a year ago, due to increases in sales of wafer manufacturing and processing equipment. Domestic sales of 59.18 billion yen ($543.9 million) were down 5% sequentially, due to a 12%-14% dropoff in sales for the two biggest categories, wafer processing and inspection. For the second consecutive month, worldwide and domestic sales were more than double the levels from a year ago.

The book-to-bill ratios for both worldwide and domestic demand rose back to parity levels at an even 1.0 in May; however, both are down compared with a year ago (worldwide was 1.04 in May 2003; domestic was 1.43). A book-to-bill of 1.00 means that $100 in new orders was received for every $100 of product billed for the month.


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