October 19, 2007 – The latest monthly figures are in for semiconductor equipment demand, and the data is ugly just about any way you slice it.

Tool orders (a three-month average) reported by North American-based suppliers totaled $1.23B in September 2007, about -10% from August and -25% from Sept. 2006. Billings also were down, about -10% M-M and -9% Y-Y to $1.51B. Those levels pushed the September B:B down another tick to 0.81, well below the parity level (1.0), meaning just $81 worth of orders were received for every $100 of product billed for the month.

Stanley Myers, president/CEO of SEMI, blamed the orders slump in part to comparisons vs. peak levels earlier this year, “which were driven largely by strong investments in 300mm memory capacity.” And with Micron and Hynix both cutting FY08 capex budgets (though Samsung pledges to spend more), the picture for future tool demand is somewhat murky.

A closer look at the latest bookings and billings numbers compiled by SEMI shows just how bad the numbers are starting to look:

– In terms of dollars, September bookings were the lowest since Jan. 2006, down -25% since a peak in May ($1641.9B), and -23% over just the past three months — the worst three-month slide since Jan. 2005.

– The -25% Y-Y decline in bookings is the worst since Sept. 05; and a four-month streak of Y-Y double-digit % declines hasn’t been seen since late 2005 (Aug-Nov).

– Billings (in US$) have fallen -14.5% since a peak in June ($1786.1), a three-month skid not seen in a year.

– The -10.2% M-M drop in billings is the worst in nearly five years (Jan.03, -10.7%), and 3x months of negative growth hasn’t happened in a year.

– Both single-month Y-Y decline (-9.5%) and two straight months of Y-Y % declines haven’t been seen since Nov. 2005.

– The B:B is now at three straight months of <0.84 (not since Feb-April 2005), and eight months below parity and counting -- the previous ministreak was four months in Aug-Nov 2006, and before that, 17 months spanning late 2004-early 2006.

North American equipment bookings, billings — September 2006-September 2007

Month…….Billings…….%M-M………%Y-Y……….Bookings……..%M-M……..% Y-Y………B:B
……………..(US $M)…………………………………………….(US $M)…………………………………..
………………(3-mo. avg.)………………………………….(3-mo.avg.)……………………………………..

Sept’06…………..1672.8……-4.0%……..53.7%……….1639.2…….-5.2%…….66.6%……..0.98
Oct’06…………..1562.9……-6.6%……..36.4%……….1468.6……-10.4%…….34.3%……..0.94
Nov’06…………..1486.1……-4.9%……..26.0%……….1426.5…….-2.8%…….30.5%……..0.96
Dec’06…………..1482.3……-0.2%……..21.1%……….1497.2……..5.0%…….31.0%……..1.01
Jan’07…………..1448.0……-2.3%……..15.0%……….1445.8…….-3.4%…….17.9%……..1.00
Feb’07………….1423.0……-1.3%……..11.3%……….1398.1…….-3.1%……..8.3%……..0.98
Mar’07………….1436.4……..0.9%……….7.3%………..1419.6………1.5%………2.5%……..0.99
Apr’07………….1594.7……..11.0%……..10.1%………..1567.5………10.4%………-2.1%……..0.98
May’07………….1670.2……..4.7%………15.0%………..1641.9………4.7%………1.4%……..0.98
June’07…………1768.1……..5.9%……….13.5%………..1607.6……..-2.1%………-9.8%……..0.91
July’07………….1685.8…….-4.7%……..2.9%………..1406.3…….-12.5%……-18.9%……..0.83
Aug’07(f)………..1682.3……-0.2%……..-3.5%……….1371.2…….-2.5%……-20.7%……..0.82
Sept’07(p)……….1501.8……-10.2%……..-9.7%……….1228.6……-10.4%……-25.0%……..0.81