September 17, 2010 – The latest data from SEMI tracking semiconductor equipment makers based in North America confirms that demand is still slowing down, but the sector is still at record levels.
Inside SEMI’s August stats:
- Bookings: $1.82B in August, registered their first sequential decline in 17 months. But it was only a -1% slip, so levels are still roughly at an all-time high for the past decade.
- Billings: $1.55B, up slightly (~4%) though still comparable to previous highs seen three years ago (Sept-Oct 2007), and have risen for 16 straight months. Growth has slowed, though, to the low single-digits in three of the last four months.
- Both orders and sales remain well above the same period a year ago (nearly 200%). Final figures for July were slightly up the preliminary figures, by a fraction of a percent.
- Book-to-bill: 1.17, meaning $117 worth of orders was received for every $100 of product billed during the month. The B:B has stayed above the 1.0 parity mark for 14 consecutive months — the past eight of them above 1.13. Generally speaking this means more business continues to come in (orders) vs. go out (sales). It should be noted that sales typically trail orders by six months or more, so an upward — or downward — trend in bookings should eventually be reflected in the sales column.
For the backend (test/assembly) sector, billings also rose 4% in August after an 8% hike in July, and assuming a flat September that implies 20% growth for the third quarter — and that’s better than expected, writes Deutsche Bank’s NIgel Coe, in a research note. Backend bookings in August fell more than the total (-10% M/M), but that’s in-line with typical seasonality, he adds.
Business in Japan reflects the North American market, with bookings slowing vs. sales. SEAJ reports a 1.6% inch in bookings to ¥127.47B (US $1.49B) vs. a 12.6% increase in sales to ¥92.51B ($1.08B). The Japanese B:B still remains exceedingly high at 1.38 ($138 worth of orders was received for every $100 of product billed during the month) — the third highest level in the past year, according to SEAJ archives.
SEMI also released its 2Q10 data by region. Global demand kept rising, with both bookings (24% to $11.68B) and billings (22% to $9.11B) going strong. Note the strongest sequential growth is in North America, Europe, and China, while Y/Y it’s China and Korea who have stepped on the gas.
Quarterly data by region in US $M. Figures may not add due to rounding.
From a macro level, the August slowdown in bookings won’t change the fact that 2010 will be a banner year for semiconductor equipment demand as fab projects roll along. But it also offers more evidence that a peak may have been reached this summer. 2011 will be softer — but still full of opportunities if toolmakers know where to look.