SEMI: 1Q08 demand soft, but some regions doing ok

June 17, 2008 – Worldwide demand for semiconductor manufacturing was notably soft in 1Q08, with bookings down >20% from a year ago, but some regions are clearly working through the downturn better than others, according to the latest data from SEMI.

Sales in 1Q08 totaled $10.75B, which was actually an improvement of 7% vs. 4Q07, and down just -2% vs. 1Q07, according to the data compiled by SEMI and the Semiconductor Equipment Association of Japan (SEAJ). Orders, though, have slumped badly — down to $8.08B, declines of -11% Q-Q and -23% Y-Y. Some back-of-the-napkin math suggests the book-to-bill ratio was thus an anemic 0.75, meaning $75 worth of orders were received for every $100 worth of product billed for the quarter.

While acknowledging the soft order environment, SEMI president/CEO Stanley Myers noted that some regions (North America, Korea, and China) actually posted strong sequential Q-Q growth in 1Q08; all regions showed at least some Q-Q growth in sales, with two of the biggest regions (Taiwan, Japan) eking out low single-digit growth.

Year-on-year, a few regions are well ahead of last year’s equipment purchasing pace, led by China (25%) and Taiwan (18%), with Japan (5%) and North America (3%) also in the black. Korea (-30%), Europe (-6%), and Rest-of-World (-15%) continue to slump.

SEMI’s 1Q08 summary seems pretty much in line with the latest revised outlook from Gartner Dataquest, which projects equipment spending will decline ~17% in 2008 — vs. earlier forecasts of -10% about three months ago, and roughly flat six months ago.


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