August 19, 2009 – The good news: semiconductor equipment sales, and especially orders, soared in July to re-achieve parity for the first time in two and a half years. The bad news: the balanced levels are still a third of what they were then.
North American equipment bookings (a three-month average) came in at $569.7B, a 62% spike from the prior month and more than double where they started the year. Tool sales rose 22.1% M/M to $538.0B. Both are by far the best growth numbers seen in a long time, though Y/Y comparisons are still not pretty (-36% bookings, -50% sales).
Those spikes pushed the book-to-bill ratio (B:B) to 1.06, the first time it’s been above the 1.0 parity mark since Jan. 2007, and its highest since July 2006. That means $106 worth of orders came in for every $100 worth of product billed for the month. But don’t get misled; those previous marks were three times the volume of current levels: ~$1.45B in Jan.2007, and $1.64-$1.74B in Jul.2006.
And there’s the rub with focusing on B:B. While historically it’s been an indicator of future industry performance (≥1.0 indicates more orders than sales, i.e. good demand), they cloud the greater issue of dollar levels being so low. If parity is reestablished at a third of what they were, some question whether a true rebound is realistic, and claim visibility is still too poor to hold much confidence.
Things seem better in Japan, where the B:B has surged well above the 1.0 parity mark for two months in a row, pushing to 1.34 in July on a 23% increase in domestic semiconductor orders to ¥43.79B/US $462M (though down 53% from a year ago), according to the Semiconductor Equipment Association of Japan (SEAJ).