By James Montgomery, News Editor
A look at regional sales of semiconductor manufacturing equipment shows one region far outperformed all others during an overall flat first quarter, according to data from Semiconductor Equipment and Materials International (SEMI) and the Semiconductor Equipment Association of Japan (SEAJ). The results are based on data gathered from more than 150 global equipment companies on a monthly basis.
Worldwide total billings for semiconductor manufacturing equipment were $9.35 billion in 1Q05, creeping up 6.5% from 4Q04 and just 2.3% from 1Q04. Bookings continued to drag, down 12% quarter-on-quarter and 21% year-on-year to $7.25 billion.
Sequentially, Taiwan (-41%), North America (-10%), and China (-2%) all reported slower sales than the previous quarter, with most other regions posting slight single-digit growth. Compared with the same quarter a year ago, North America (28%) and Europe (26%) posted double-digit sales growth, while China (-38%), Taiwan (-35%), rest-of-world (-26%), and Japan (-2%) were below last year’s levels.
The standout region in 1Q05 by far was South Korea, which saw equipment sales rocket to $2.33 billion in 1Q05, a 165% increase sequentially and 61% from the same period a year ago — a follow-up to a strong 2004 in which it posted a 45% increase in equipment sales. George Burns, president of Santa Cruz, CA-based analyst firm Strategic Marketing Associates, pointed to recent activity from Samsung, which has increased spending for equipment on its DRAM line 13, and begun to equip its flash-memory line 14, projected to ramp to volume production by July. The chipmaking giant, which earlier this year revealed a 2005 capex budget of $5.7 billion, a 20% increase from 2004 (see WaferNews, V10n4, Jan. 24, 2005), also has approved spending of up to $780 million to upgrade technology for its 200mm fabs. Burns added that Hynix Semiconductor also is “spending lots” on its 300mm fab.
Burns also explained that the slowdown in China’s demand for chipmaking equipment, which declined 2% Q-Q and 38% Y-Y in 1Q05, can be attributed not only to a soft market but also to economic challenges. “Chinese companies are hitting a financial wall,” he said, noting that SMIC has been scrambling after being stonewalled by the US Export-Import bank for a $700 million loan to fund equipment purchases (see WaferNews, V12n9, Feb. 28, 2005), and other Chinese chipmakers such as Grace and NEC/Shougang also are encountering financial difficulties. The pause stems from “exuberant optimism” starting in 2001-2002, when “everybody decided they wanted to build a fab at once, betting on the China market,” Burns said. — J.M.