December 21, 2000
Semiconductor Capital Equipment Update
November book-to-bill
Sue Billat 650/289-7226 sue_billat@rsco.com
Suresh Balaraman 650/289-7228 suresh_balaraman@rsco.com
Heidi Poon 650/289-7229 heidi_poon@rsco.com
T E C H N O L O G Y / S E M I C O N D U C T O R
E Q UI P M E N T R E S E A R C H
Key Points
· The November preliminary book-to-bill ratio was 1.12, down from October’s (revised) 1.16. Overall bookings declined 8% from the record of $2.99 billion achieved in November. In our view, the decline is consistent with our flattish growth outlook and recently reported pushouts capital equipment companies, such as Novellus(NVLS $29 7/8), are experiencing.
· Orders for front end declined 8% sequentially to end up at $1.844 billion in November. Book-to-bill for the front end was still at a healthy 1.24 but below the 1.28 level achieved in October largely due to the fact that shipments declined by only 5%.
· The industry bookings number are consistent with our recently revised outlook for a flat 2001. In our opinion, front end equipment growth is likely to be 3-7% higher than the overall industry growth, as this is where most of the technology investments reside, especially those moving to copper interconnect and new materials.
· As we had expected, back end bookings continue to trend downward in November, declining 11% sequentially to $457.6 million. The three month average shipments in November also
declined, albeit more modestly, decreasing sequentially by 6% to $599.0. This leads to a book-to-bill of 0.76.
· The back end equipment sector, we believe, is likely to remain in a digestive phase for a longer period of time due to the overbuilding at the packaging and test houses in Asia in the early part of this year. In addition, we believe there is less technology change to provide a boost to the sector in 2001.
· Even though the overall bookings are down only 8% from the record levels achieved last month, many of our stocks are down significantly from their peaks and, in our view, have
more than factored in the softness in outlook. Accordingly, we expect no significant impact as a result of these SEMI bookings numbers. We expect the next major milestone for our
stocks to be capital budget announcements in January 2001. |
