August 17, 2006 – Global demand for semiconductor manufacturing equipment ended up right about as expected in July, with a little fallback from spiky June numbers in equipment orders, IC sales, and unit shipments, according to the latest data from VLSI Research Corp.

Equipment bookings in July totaled $5.83 billion, down 12.5% from June, and a 13.3% increase from July 2005. Tool billings were down just 1% during the month to $5.18 billion (though assembly equipment increased ~5%), but also were about 13% higher than a year ago, with ~16% Y-Y growth in sales of fabrication equipment and test equipment, and ~21% growth in assembly tools. The book-to-bill ratio (B:B) remained well above the 1.0 parity mark at 1.13, meaning that $113 worth of orders were received for every $100 worth of products billed during the month.

Utilization rates for frontend, test, and assembly fell a couple of points in July to 89%-91%, and are expected to remain there through the next couple of months, before ramping up to ~92% in October and November, and back down to ~88% in December.

Meanwhile, IC orders dipped 0.7% to $18.08 billion, vs. $16.50 billion in July 2005. IC sales dipped a little more than expected vs. June (-20.4%, to $15.26 billion), but remain about 8.5% above last year’s levels. The IC B:B remained fairly steady at 1.08, vs. 1.11 in June and 1.09 in July 2005.

Chip production slowed by 1.8% to 468.2 MSI, compared with 457.3 MSI a year ago. Capacity in July was 524.0 MSI, up a fraction from June and 5.4% from July 2005. IC unit shipments fell about 16% as predicted to 10.32 billion units.

For August, VLSI projects the seasonal “dog days” to kick in for the equipment industry — orders down 16% to $4.90 billion, sales down 6% to $4.88 billion, and overall utilization rates dipping another point to 89%-90%. Meanwhile, chipmakers are getting ready for their seasonal peak output in the fall, with chip orders (+4% to $18.69 billion), sales (+10% to $16.83 billion) and unit shipments (+6% to 10.95 billion) all on the upswing. VLSI projects little change in either total chip production (468.1 MSI) or capacity (525.0 MSI) through the next month.