Head-fake or hope in new SEMI numbers?

by James Montgomery, News Editor, Solid State Technology

Sept. 22, 2008 – Last month we surveyed the bombing range that has become SEMI’s monthly chip-equipment numbers. With the latest data now published for August, it’s time to redraw the map with a few slight alterations:

– Bookings of ~$884M (-0.6% M-M, -35.5% Y-Y) are at their lowest since September 2003 (was: October 2003), and the fifth (fourth) straight month of ≥-30% Y-Y slumps, tying a low-water mark from mid-2005.

– Bookings have remained below the $1B mark for three (two) straight months, a trend not seen since late 2003.

– We’re now at 15 straight months of Y-Y order declines, -50% (-49%) off the peak of two summers ago, a string not seen since 2001-2002. And one more month will exceed even that Dark Age.

– Billings ($1065.5M, -1.1% M-M, -36.7% Y-Y) are at their lowest since August 2005, with ≥-35% declines in each of the past three (two) months — something the industry last accomplished in the spring of 2002.

On the other hand, maybe there really is a ray of hope to be found, if one wants to believe in short-term indicators. Note in the table below that the declines in bookings (both vs. prior month and year-ago) and billings (M-M) have slowed down in the past two months — in fact, chip tool demand in August was almost flat for both. And the B:B ratio held flat at 0.83 (meaning $83 worth of orders was received for every $100 worth of product billed), but it’s been flat or climbing since April.

So, for the optimists out there, remember that once a bottom is established, any uptick will likely first be seen in tool orders. And SEMI president Stanley Myers, in a statement, reiterated the group’s persistent claim that “there are indications of resumed spending in 2009.”

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