SEMI: June sales typical 2Q end; bookings still soft

July 23, 2007 – The latest monthly data from SEMI indicates soft demand at the midpoint of 2007, days after the group joined the growing chorus of industry watchers in expressing pessimism that the equipment industry will see anything above a few percentage points of growth this year.

After revising May figures slightly down (billings a fraction of a percent, and ~1.6% for bookings), SEMI reports preliminary June billings from North American-based manufacturers of semiconductor equipment were $1.75 billion, up about 5% from May and nearly 13% from June 2006, perhaps indicating a typical end-of-quarter sales push. That level in terms of dollars surpasses August 06, and represents four straight months of positive sequential growth, following six straight months of declines.

Preliminary bookings, though their highest dollar amount in nearly a year ($1.65 billion), were essentially flat (0.6%) vs. May, and down -7.3% from a year ago, the worst Y-Y decline since December 2005.

Also taking a dip was the June book-to-bill ratio (B:B), which fell further below the even-parity mark to 0.94, meaning that $94 worth of orders were received for every $100 of product billed for the month. That’s the lowest since October 2006 (also 0.94); the previous low before that was also in December 2005.

Despite the clear slowing trend so far this year, SEMI still sees “strong sales in 2007” for North American-based semiconductor manufacturing equipment, topping $40 billion, thanks to investments in 45nm and 300mm tools. That avoids the topic of growth, though — which in its midyear forecast last week, SEMI shaved down to just 1.1% growth, instead of the 3.7% it previously projected. The group also now sees 2008 with barely mid-single-digit growth as well, vs. 13.3% it thought at the beginning of this year.


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