It's difficult to tell from industry statistics just where the electronics industry is heading, but the shifts and changes in personnel and real estate are more telling than the numbers.
Numbers never lie, right? So when the most evident measure, the North American Semiconductor Equipment Industry's (SEMI) book-to-bill (B:B) is posted, everyone notices. The B:B ratio in July 2004 stood at 1.05, compared to 1.15 in February, 1.09 in March, 1.13 in April, 1.10 in May and 1.07 in June. Clearly, this shows a slowing of new orders over product billed in a month-to-month comparison. Jonathan Davis, SEMI's VP of communications, characterizes this as stable and not too dramatic. And Stan Meyers, president and CEO of SEMI, says, “The bookings and billings values for North American-based equipment companies have stabilized at high levels and support our global billings outlook for the second-highest revenue year on record for our industry.”
I'm certainly not a statistician, but when numbers go down, it isn't as healthy as when they go up (at least not in my checkbook).
Jim Tully, VP and distinguished analyst at Gartner Dataquest, recently predicted that after several years of consolidation and contraction, the semiconductor industry is poised for significant growth. “Gartner projects that global chip demand will grow 25% in 2004 and 14% in 2005, and the long-term forecast calls for a $300 billion semiconductor industry by 2008.” Where chips go, so follow advanced packages. Perhaps we need not worry about a second-quarter inventory buildup in semiconductors.
In fact, Gartner bumped up its outlook for chip sales growth in 2004 to 27%, from the earlier prediction of 25%, but concludes that it now expects 2005 revenue growth to be at 9%, rather than the earlier predicted 14%.
What's happening in real estate and people in the news? Chandler, Ariz.-based Amkor Technology Inc. recently changed its president and COO from Bruce Freyman to John Boruch, a former vice chairman. Boruch joined Amkor in 1984 as vice president of sales, and became president in 1992 and COO in 1999. Most recently, Amkor purchased Unitive Inc. at a cost of $71 million to expand its expertise in the growing area of 300-mm wafer bumping. With this acquisition, Amkor gained turnkey wafer-level chip scale packaging and Unitive gained the support of a more permanent partnership than their previous contract.
Back-end consolidation didn't start with STATS ChipPAC, but continues almost monthly. For instance, ChipMOS Technologies Inc. has purchased all of the testing and assembly assets of First International Computer Testing and Assembly Technology Inc., located in Taiwan.
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Change can be painful, but it can be a productive, interesting time as well.
Gail Flower
Editor-in-Chief