VLSI: Chip industry finally above parity

July 13, 2009 – After nearly a year in the red, semiconductor equipment manufacturers finally broke back above the “parity” mark for bookings vs. billings an indicator of future business stability and growth.

Worldwide bookings rose to $25B in June, up 40% vs. May, and billings rose 31% sequentially to $2.4B, for a book-to-bill ratio (B:B) of 1.01 — meaning $101 worth of product orders were received for every $100 recorded in sales. As other market watchers have noted, though, the levels though appearing stabilized are still well below where they were a year ago; bookings -41% from June 2008, and billings down -57%.

Nevertheless, “business activity is beginning to improve,” particularly for backend suppliers boosted by “soaring utilization rates at the subcons,” VLSI Research said in a statement. On the frontend of production lines, investments are technology-driven (vs. capacity additions), supporting a ramp of 3Xnm and 4Xnm node process technologies. The firm also cites a push in orders from the long-dormant memory sector, thanks to a transition to DDR3 memory.


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