World News
11/01/2003
BUSINESS TRENDS
Book-to-bill data reflect chipmakers' caution
Worldwide manufacturers of semiconductor equipment posted a book-to-bill ratio of an even 1.00 in August, down slightly from 1.02 in July but still the second consecutive month above the parity level, according to VLSI Research. A book-to-bill of 1.02 means that $102 in new orders was received for every $100 of product billed for the month.
Equipment manufacturers posted orders of $2.11 billion and billings of $2.11 billion in August, down noticeably from July's totals of $2.51 billion and $2.46 billion, and the lowest totals so far in 2003. Of the total billings, $1.13 billion were for wafer-processing equipment, $544 million for test and related equipment, $143 million for assembly, and $294 million for service and spares. All sectors were down from July, ranging from 4%–20%.
For chipmakers, the three-month book-to-bill ratio dipped to 1.08 in August, down slightly from July's upwardly revised figure of 1.15. Worldwide bookings were at $12.18 billion, compared with July's revised totals of $12.56 billion. Billings were at $11.08 billion, compared with $10.29 billion, which was revised downward from earlier estimates. Capacity utilization was 85.5%, compared with 85.4% in July.
"With chipmakers reluctant to invest, the equipment industry is going nowhere," stated VLSI. Without robust order activity, VLSI predicts "very little growth in equipment revenues for all of 2003."
As a result, VLSI has adjusted its forecast for 2003. Equipment revenues are now projected to come in at $30.2 billion, a 4% reduction from earlier estimates, but still up slightly from 2002. IC billings, meanwhile, have been tracked up to $135.6 billion, more than 12% higher than 2002.
 Book-to-bill ratio for both IC and frontend utilization from March–August 2003. |
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WORLDWIDE HIGHLIGHTS
Worldwide semiconductor sales totaled $12.90 billion in July, up a bit from the $12.54 billion in revenues reported in June 2003, and a healthy 10.5% jump from $11.68 billion in sales a year ago, according to data from the Semiconductor Industry Association (SIA).
Sales of PC-related products were a strong factor in semiconductor sales in July, with microprocessors up 5.6% and DRAMs up 8.2% over June figures. Demand for DVDs, digital cameras, and related products continued to drive consumer sales; optoelectronics sales increased 5.3% over June, with flash memory up 5.7%.
SIA President George Scalise says the July sales represent a "continued strengthening of the semiconductor market," which will exceed SIA's forecasted sequential growth of 5.9% in 3Q03. SIA predicts the consumer, computation, and communications sectors will all see significant gains due to "seasonal 3Q patterns, such as consumer builds for back-to-school and the year-end holidays."
Geographically, sales in Japan grew the most between June and July, up 4.8%, followed by the Asia Pacific region (2.9%), Europe (2.3%), and the Americas (1.0%). Europe's sales reflect a rebound from June, when sales declined 4.1%. Compared with June 2002, sales in all regions grew by double-digits except in the Americas, which were down 3.5%.
SIA data indicate capacity utilization at the leading edge (≤0.15µm technologies) has reached 94%.
USA
Applied Materials, Santa Clara, CA, and Agilent Technologies, Palo Alto, CA, have developed new benchmarks for testing copper and low-k materials used in advanced interconnects. The project was conducted at Applied's Maydan Technology Center using Agilent's Parallel Parametric Reliability test system, which Applied uses for 90 and 65nm processes.
Dow Corning, Midland, MI, has formed a new business to serve the wideband gap semiconductor industry. Dow Corning Compound Semiconductor Solutions includes technology obtained through recent acquisitions, including silicon carbide (SiC), SiC thin-film technology, and gallium nitride thin-film technology. The business will be located in Midland in order to consolidate R&D and manufacturing with other Dow operations.
ASIAFocus
China
Semiconductor Manufacturing International (SMIC), Shanghai, is reportedly considering buying a stake in an idle chip plant owned by Motorola in Tianjin. Motorola had previously sought partners to help run the facilities. SMIC currently is building three chip plants in Beijing.
Fujitsu has completed its IC packaging and testing plant in Nantong, in the eastern Chinese province of Jiangsu. The facility has a package capacity of 1.5 billion ICs and 400 million tests/year.
Taiwan
Taiwanese chipset maker Silicon Integrated Systems Corp. (SiS) has proposed to spin off its 8-in. wafer fab into a fully owned subsidiary. The deal would create SiS Microelectronics, with an initial capitalization of $234 million, and stifle rumors of a possible sale to major shareholder United Microelectronics Corp.
Siemens Dematic hopes to strengthen its business for microbeam lasers, used to create tiny drillings for bonding circuit path levels, with a new sales office in Taiwan. The center will help domestic companies complete pilot applications and will eventually explore sales partnerships in the region.
Japan
Olympus Optical Co. Ltd., Tokyo, has formed a new MEMS technology division to unify its MEMS activities, including R&D and foundries. The deal will increase Olympus' MEMS facilities by 30% and expand its capabilities to 4- and 6-in. wafers.
Toshiba Corp. plans to quadruple productivity at its new 300mm plant in Oita, according to local media. The company will reportedly cut the number of trial productions from between three and six to one. Toshiba hopes to have the process ready for commercial runs by summer 2004, with full adoption in 2005.
Sipec Corp. will provide technical services to Central Semiconductor Manufacturing Corp. (CSMC), Japan's second-largest foundry. Sipec will reportedly help transport and install 150mm equipment purchased from Chartered Semiconductor for CSMC's plant in Wuxi, where the line is scheduled to begin production next year.
Singapore
UMC Japan (UMCJ) has invested $45 million in UMC's 300mm affiliate in Singapore, UMCi. The investment will secure access to UMCi's capacity for up to 2000 wafers/.month, allowing UMCJ to serve its Japanese customers by providing access to process technologies manufactured on 300mm wafers.
Matsushita says it will invest more than $85 million in its operations in Singapore, a third of which will go toward the island republic's first facility for manufacturing CCD image sensors. The remainder will be spent over the next three to five years for expanding capacity of its LSI and other devices, as well as R&D. The investments are expected to increase the company's domestic workforce by 60%.
Korea
Increasing production to meet demand, South Korea's exports of chips to China have more than doubled in the first seven months of 2003, according to data from the Korea International Trade Association. Exports by domestic chipmakers totaled $758 million from January to July, compared with $339 million over the same period a year ago. Imports from China were up to $303 million, a 60% jump from last year.
Malaysia
The Malaysian government has purchased RFID chip technology from Japanese semiconductor developer FEC Inc. for an undisclosed amount. Silterra Malaysia and FEC will co-produce the "MM Chip," about 5¥ smaller than conventional RFID chips. Initial manufacturing will begin in Japan and shift to Malaysia by next year.
EuroFocus
STMicroelectronics, Geneva, Switzerland, and Alien Technology Corp., Morgan Hill, CA, have agreed to jointly design, develop, and manufacture low-cost RFID technology, with STMicro serving as a second-source for Alien's EPD Class 1 chips. The companies, both members of industry consortium Auto-ID, aim to produce by 1Q04 an RFID chip costing less than a penny, substantially less than current RFID chips, which can cost as much as $0.50.
Siemens AG, Munich, Germany, and chemical supplier Air Products, Spring House, PA, have entered into a 5-year agreement expanding their efforts in process automation and safety technologies. The new deal covers all of Siemens' fieldbus-based products.