The SEMI Book-to-bill Continued to Decline

Published:2011/9/15 22:02:00 Author:Phyllis From:SeekIC

The North America-based semiconductor capital equipment makers reported a book-to-bill ratio of 0.80 in August, the lowest level it has been since Semiconductor Equipment and Materials International (SEMI) began keeping track in 1995. The August book-to-bill ratio eclipses the revised version of the previous low water mark of 0.66 that set just one month earlier in June. A book-to-bill ratio of 0.80 means that $80 in orders were received for every $100 worth of product shipped during the month.

The SEMI book-to-bill is a ratio of three-month moving average bookings to three-month moving average shipments. Shipments and bookings figures are in millions of U.S. dollars.

The worth of North American fab tool vendors’ order in August is 1.18 billion dollars, 8.8 percent down than July and 34.8 percent than the same time last year. According to SEMI, three-month average shipments in August were $1.06 billion, 5 percent below the July level and 21 percent below the August 1997 level. Three-month average bookings decreased this August to $632 million, 14.7 percent below the July level and 55.9 percent below the August 1997 level.
The declining sales trends for new semiconductor manufacturing equipment are caused by weaker DRAM demand, foundry spending reductions and near-term uncertainties about electronics demand, the SEMI three-month average billings are the lowest ever since June of 2010.

Dan Hutchinson, president of VLSI Research, a San Jose, Calif.-based market research firm, said that cancellations would affect those numbers. He said the downturn was the worst he has seen in his time in the industry and second only to a one-year downturn in 1966 as far as what his company has historically measured as the worst.

Experts believed that the concept of a summer slowdown was much more prevalent in the PC world than the equipment world, but this year it was heightened by the fact that some capital equipment companies and semi companies had shutdowns over the summer. The equipment companies are saying semiconductor companies just aren’t buying anything.

Dick Greene, principal analyst with SEMI, said it’s not surprise that the trend on orders for semiconductor equipment remains down. There are positive signs, however, that the chip declines may be leveling off. Computer sales are apparently strong heading into the fall season and Intel reported better than expected chip sales in the third quarter. While the equipment market should also see a leveling, the prospects for recovery still appear to be at least 12 months off.

If there is any rise in the book-to-bill for September, it will be slight at best. Looking at just a book-to-bill alone does not tell you the full story. If you look at back-end equipment, orders declined 7 percent and shipments were flat.

Things are sort of bumping around the bottom, so the world is not that bad right now. It’s not wonderful, but it’s beginning to look as though it has leveled off.

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