Searching for the bottom: Half the equation fulfilled?

April 20, 2009 – News flash: The market for chip tools is still awful. But for those seeking hope, the heavy declines in orders for tools seems to have abated, what may be the first step in a long road back to an industry turnaround.

Makers of semiconductor manufacturing tools based in North America reported $278.9M in bookings in March, about 8% higher than in February, though still down ~76% from a year ago, as has been the trend lately. Billings dropped off significantly to $455.3M, down -13% sequentially, and now down -66% from March 2008. Both are based on three-month averages. Final February numbers were revised down by about 2% in bookings (~$5M) and nearly 4% in sales (almost $21M).

For the opening quarter of 2009, bookings total $814.5M, down -63% from 4Q08 and down -77% from 1Q08 — which was, it now appears, the peak of the market. Sales in 1Q were down -33% sequentially, and -60% from the same period a year ago, again invoking memories of early 2002 post-crash woes.

The swing to the positive for M-M tool orders growth, just the third month of growth in the past year, is a good sign — tool demand has hovered around the same ~$250M-$270M mark for the past three quarters, perhaps suggesting a whiff of a trough having finally been reached (though those levels are also unprecedented, going back to the beginning of when the data was first tracked in 1991). The book-to-bill ratio (B:B) of 0.61 ($61 in orders for every $100 in sales) is a decent improvement from the prior two months of 0.47 and 0.49, but that merely indicates the airplug in the supply chain first caused by plummeting orders has extended through to the sales end. “Semiconductor equipment bookings remain at levels below that needed to support a healthy supply chain,” noted SEMI president/CEO Stanley Myers, in a statement.

Then again, how many months in a row of calling a bottom does it take before it finally happens?


Easily post a comment below using your Linkedin, Twitter, Google or Facebook account. Comments won't automatically be posted to your social media accounts unless you select to share.