February 23, 2011 – More evidence for a slowing market: SEMI’s January data is back on a downward trend for demand in semiconductor equipment, though the group is "encouraged" by recent capex announcements.
A look inside the January 2011 numbers:
- After December’s 4% snapback, bookings are headed back down the slope again, -3% M/M to $1.53B. That’s five declines in the past six months, eroding more than $300M or about 16%. (And the massive Y/Y comparisons we’ve enjoyed the past year? Gone. It’s now just 30%, less than half the Y/Y growth in December 2010.)
- Billings fell back off a December surge to a small 2.5% increase to $1.80B. They’re still double the level they were at a year ago, and now back above mid-2007 levels. (Next stop: early-2001 levels?)
- The book-to-bill ratio fell again in January to 0.85, which translates to $85 worth of orders received for every $100 billed. That’s a trend of less business coming in than going out. And we’re now four months below the 1.0 parity mark, a consecutive stretch not seen since the spring of 2009 — but that’s when numbers were rising off the bottom of the downturn. A four-month stretch of increasingly sub-parity B:B hasn’t been seen since early 2008.
SEMI backdated about $55M in tool sales and an extra ~$45M in orders to its December figures, but those didn’t change the B:B.
Despite the direction of tool orders, SEMI president/CEO Stanley Myers noted in a statement that industry spending is still solid, and he is "encouraged by the strength in capital expenditure plans announced over the past month."
|North American equipment demand in US $M, a 3-mo. average. (Source: SEMI)|
In Japan, the trend of slowing demand was similar. Semiconductor tool sales rebounded about 5% after a December lull (+66% vs. a year ago) to ¥103.96B (US $1.24B), but orders slipped about -3% M/M (+21.5% Y/Y) to ¥103.36B ($1.24B), pushing the B:B ratio just below the parity level at 0.99. It’s the first sub-parity B:B in Japan in nearly two years, since May 2009, according to SEAJ data. Bookings levels have pulled back almost 20% since their September peak; billings are off about -7%.