Worldwide highlights

06/01/1998

Worldwide highlights

Equipment sales drop in February.

North American equipment companies saw February orders drop 5.4% from January levels. SEMI noted that North American equipment vendors had a book-to-bill ratio of 0.92 in February, with three-month average orders at $1.23 billion and shipments at $1.34 billion (4% below January). However, both figures were well above year-ago levels, orders by 17% and billings by 38%. Front-end tools, with a book-to-bill of 0.89, showed more softness than assembly and test equipment, which came in at 0.98. Front-end bookings dipped 5% month-to-month to $862.2 million.

FPD capital spending slow now, but on the rise.

Ross Young, president of DisplaySearch, Austin, TX, says 1998 will see capital spending by flat panel display (FPD) manufacturers drop to under $1.5 billion, down from about $2 billion in 1997. However, says Young, "It`s going to recover quickly - we see pretty much every fab adding capacity in 1999." Spending in 1999 could exceed $3 billion. Most of the spending in the first three quarters of 1998 will be for low-temperature polysilicon capacity for small and medium-sized consumer electronics and notebook PC displays, rather than higher-end thin film transistor (TFT) units. By year`s end, reduced capital spending on TFTs will result in supply and demand being in rough balance. Young expects capacity to remain tight for about two years as notebooks utilize larger displays (13-, 14-, and even 15-in.) that require TFT architectures. DisplaySearch also foresees good growth in FPDs for desktop monitors - from 8% of TFT capacity this year to 25% in 1999. The total TFT display market is seen growing about 9% this year to $7.3 billion, with annual growth for 1999 and 2000 pegged at 26% and 27%, respectively; in 2000, market size of $13.6 billion is seen.

Chip sales drop in February. Worldwide chip sales declined on a month-to-month basis for the third consecutive time in February, to $10.52 billion, according to the Semiconductor Industry Association (SIA). The SIA noted that the sales level is the second highest February total since 1990, and that sales were up marginally compared to a year earlier. Moreover, the level of improvement has been dropping steadily since last summer (see table). Last August, sales were a full 15.3% better than a year earlier, but this margin has diminished every month since. The yen/dollar exchange rate has played an important role; all regions except Japan showed year-to-year growth in February, and Japan`s 13.2% decline in dollar terms would have been just 4.5% had the rate remained constant.