Record orders for chip gear push SEMI index to four-year high
By J. Robert Lineback
Semiconductor Business News
(02/23/00, 08:44:52 AM EDT)
MOUNTAIN VIEW, Calif.--Chip makers worldwide continued to place record orders for production systems in January, pushing the book-to-bill ratio of North American-based suppliers to 1.34 from a revised figure of 1.19 in December, according to new market numbers released by the Semiconductor Equipment and Materials International (SEMI) trade group.
SEMI's 1.34 book-to-bill reading is a four-year high for the chip equipment index, and it reflects the third-straight month of record orders for production gear. Bookings were up 15% to $2.178 billion in January from $1.892 billion in December, based on SEMI's three-month moving average.
Capital equipment suppliers have been increasing their forecasts for revenue growth in 2000 as chip manufacturers begin to add new wafer fabs and backend assembly plants. Last week, for example, Applied Materials Inc.--the world's largest semiconductor equipment supplier--announced it had increased its forecast for industry growth in wafer fab equipment sales to 46% from a projection of 19% at the end of last year (see Feb. 16 story).
The strong wave of new orders "confirms the strength of the current market cycle," said Stanley T. Myers, president of SEMI. The book-to-bill reading of 1.34 shows $134 in orders were received by equipment suppliers for each $100 worth of products shipped. The SEMI index reached 1.36 in February 1996, just prior to the start of a long and difficult slump in the capital equipment segment. SEMI's book-to-bill hit its lowest point in August and September 1998 at 0.57.
SEMI said the three-month average for equipment shipments in January was $1.620 billion, a 2% increase over $1.587 billion in December. January's billings were 82% higher than $890 million in January 1999.
January's record $2.178 billion in orders was 119% higher than $997 million posted in January 1999, said SEMI.
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