Equipment demand at five-year high, says SEMI

June 16, 2006 – Orders for semiconductor equipment reported by North American-based manufacturers pushed to $1.65 billion in May, the highest level since January 2001, according to new data from SEMI. With the second straight month of 60% year-on-year growth, it’s clear that chipmakers are responding to continued high utilization levels, the ramp to 300mm, as well as a renewed surge of investments in China.

Worldwide bookings of $1.65 billion were 3% above April figures, and roughly 64% higher than May 2005 bookings of $1.01 billion. Since a September 2005 low of $984.1 million, bookings have risen nearly 68%. Equipment sales in May also rose about 3% to $1.48 billion, a 22% increase from a year ago, and have increased 40% since a low of $1.05 billion in August 2005.

The book-to-bill ratio was above parity for fourth straight month at 1.12, meaning that $112 worth of orders were received for every $100 of product billed for the month. The B:B mark of 1.12 is the highest in more than two years.

The impressive growth vs. a year ago is attributable to slower industry conditions coming out of late 2004, Dan Tracy, senior director of industry research and statistics at SEMI, told WaferNews. Fabs are still running at high capacity utilization levels, so chipmakers are looking to add capacity. He noted particular impetus is coming from the ongoing 300mm ramp, as well as investments in China which have picked significantly compared with a year ago, when growth was stagnant following a period of rapid expansion.

Through the first five months of 2006, equipment orders totaled $7.16 billion, a 34% increase from the previous five-month period (Aug-Dec 2005), 43% higher than the first five months of 2005, and slightly ahead of the pace from the first five months of 2004. Equipment sales in 2006 through May were about 19% above the previous five-month period, 8% higher than Jan-May 2005, and 9% higher than the same period in 2004.


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