SEMI sees NA equipment demand eroding, but sticks to its guns

September 21, 2004 – Demand for semiconductor equipment has slowed, but SEMI said its forecast for strong full-year growth won’t change, and may in fact be too conservative.

North American manufacturers of semiconductor equipment posted bookings of $1.52 billion in August 2004, down 4.5% from July ($1.59 billion), but still more than double the orders placed in August 2003 ($731.8 million), according to SEMI. The bookings (representing a three-month moving average) have increased year-on-year 11 out of the past 12 months; sequentially, it’s the first back-to-back decline since late spring of 2003.

Worldwide billings in August were $1.51 billion, down slightly from July ($1.53 billion) and 90.5% from a year ago ($792.3 million). Billings decreased month-on-month for the first time in 14 months, while stretching to nine consecutive months of year-on-year growth.

The book-to-bill ratio (B:B) in August continued its downward trend, finishing at an even 1.00, compared with 1.04 in July and 0.92 a year ago. A B:B of 1.00 means that $100 worth of new orders were received for every $100 of product billed for the month. The B:B ratio has been at or above the parity mark for 11 consecutive months.

While equipment bookings and billings have pulled back from peaks seen earlier in the year, they still remain at high levels (>$1.5 billion), according to SEMI research development director Lubab Sheet. Although recent fiscal warnings by chip and equipment companies indicate potential softness in the market for the next several months, Sheet reiterated SEMI’s position that “the industry is on track to exceed our overall worldwide forecast projection of $36 billion this year.”


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