VLSI: Demand, utilization rates still falling

Worldwide demand for chip manufacturing equipment continued to slow down in October, and capacity utilization rates are inching toward slipping below the 80% mark, according to VLSI Research.

Worldwide equipment billings decreased by 16.5% in October to $3.99 billion, although still on pace for 34.6% year-on-year growth, according to VLSIh. Sales of equipment for wafer processing, test, and service and spares fell 12%-17% from September, but were up 27%-41% from a year ago. Assembly, meanwhile, displayed the sharpest sequential slide (-21%) and weakest year-on-year growth (6%). Equipment bookings in October were $3.26 billion, down 9.5% from September and off a fraction from October 2003.

The equipment book-to-bill ratio for October rebounded slightly to 0.82, up from September’s three-year low of 0.75 (revised downward from VLSI’s previous estimates), but well off from 1.11 in October 2003. A B:B ratio of 0.82 means that $82 worth of new orders was received for every $100 of product billed for the month.

October’s IC orders (a three-month average) were $14.21 billion, down about 2% from September (which was raised nearly 7% from earlier projections) and 4% from October 2003. Billings of $15.16 billion were down 16% month-on-month, but up 18% year-on-year. The IC B:B ratio of 0.89 compared with 0.94 in September and 1.13 a year ago.

Worldwide utilization rates continued to slide in October, with frontend, test, and assembly ranging between 81%?88%. By regional consumption, Korea led the pack of gainers including North America, Taiwan, and Europe, while China, Japan, and rest-of-world regions saw a dropoff from the prior month.

For November, VLSI claims equipment bookings will increase slightly to $3.30 billion, with billings rising to $4.01 billion for a B:B ratio of 0.82. IC orders and sales for November are expected to be $15.30 billion and $15.63 billion, respectively, resulting in a B:B of 0.94. VLSI also projects November capacity utilization on the frontend to dip below 80% for the first time in 19 months.


Easily post a comment below using your Linkedin, Twitter, Google or Facebook account. Comments won't automatically be posted to your social media accounts unless you select to share.