North American Chip Equipment Orders Rose in Feb.
Tue Mar 19, 7:23 PM ET
By Daniel Sorid
story.news.yahoo.com
NEW YORK (Reuters) - North American makers of equipment that builds and tests microchips saw orders rise in February for the fourth month in a row, an industry trade group said on Tuesday, indicating a potential lift from a sharp industry downturn.
Orders rose 10 percent in February to $711.6 million from revised January orders of $645.2 million, according to figures released by Semiconductor Equipment and Materials International. Chip equipment revenue was $822 million, up 3 percent from revised January revenue of $800 million.
Monthly orders have risen each month since November, when chip equipment makers reported orders of $588.9 million.
Semiconductor equipment makers had seen orders dry up and profit sink last year, as a drop in demand for computers and electronics sent a shock wave of pain through much of the technology sector.
February's ratio of orders to revenue, also known as the book-to-bill ratio, was 0.87, up from 0.81 in January. A ratio of 0.87 means that $87 worth of new orders were received for every $100 of revenue recognized in the month.
The trade group last month switched its method of reporting shipment figures to keep to the standards set by the U.S. Securities and Exchange Commission (news - web sites).
The group now measures revenue, which can be recognized only when customers accept delivery of their orders, instead of shipments, which could still potentially be canceled or returned.
Some analysts have complained that the change makes historical comparisons of the book-to-bill ratio impossible.
OPTIMISM ABOUNDS
Chip equipment companies manufacture the devices that convert discs of silicon into the tiny and powerful microchips that power the world's electronic devices. Chip makers spent $28 billion on semiconductor equipment in 2001.
The industry exploded two years ago as chip makers pushed factories to the limit in order to feed expectations for what seemed like endless demand for computers, mobile phones, and handheld devices.
Those expectations, in hindsight, were overblown. Store shelves piled up with unsold phones and computers, and chip makers watched unused chips collect dust. Orders for new chip-making equipment screeched to a halt.
At an industry conference here, companies and analysts predicted that the worst was over for the industry. Chip makers, many said, have begun to spend more on the next-generation technologies that should make powerful chips cheaper to make.
Don Mitchell, the chief executive of chip equipment maker FSI International Inc. , told investors assembled here on Monday that the industry's future is bright, with inventories of unsold chips dwindling and a sharp upturn in demand from China hovering on the horizon.
Research firm Infrastructure said orders for equipment could rise 17 percent this year. But with accounting rules that delay the recognition of revenue, industry revenue could still fall 30 percent, Infrastructure said.
Given the time it takes to make some types of chip equipment, new orders booked in the second half of the year might not show up as revenue until 2003. |
