SEAJ: Chip gear demand slumps in January

March 11, 2005 – The market for Japanese semiconductor manufacturing equipment continued its decline along with the rest of the industry, as evidenced by another significant dropoff in January.

Global orders for Japanese-made chipmaking equipment in January 2005 totaled 101.82 billion yen (US$974.3 million), off 12% from December and by 26% compared with a year ago. Worldwide billings slid 22% month-on-month to 109.81 billion yen ($1.05 billion), but still 6% better than January 2004. The book-to-bill ratio (B:B) slipped back under the parity mark to 0.94, compared with 1.05 in December and 1.38 a year ago. A B:B of 0.94 means that $94 worth of orders were received for every $100 of product billed for the month.

Domestically, the dropoff in business was even more pronounced. Billings sank 52% month-on-month and 44% year-on-year to 34.23 billion yen ($327.5 million), down 60% from its peak in June 2004 and its lowest level in more than a year. Billings declined 18% and 16%, respectively, to 59.20 billion yen ($566.5 million), down 42% from its peak achieved at last fiscal year’s end in March. The domestic B:B was 0.81, down from 1.02 in December and 1.17 in January 2004.

Based on a shifting three-month average (used to soften monthly volatilities), worldwide bookings decreased 4% from December to 113.45 billion yen ($1.09 billion), while bookings rose nearly 8% to 120.35 billion yen ($1.15 billion). Year-on-year, bookings were down 20%, vs. a 17% increase in sales.


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