Drop in chip tool orders eases, but long 'trough' period now expected
SEMI's book-to-bill up slightly at 0.46 in May with shipments now falling faster than bookings
By J. Robert Lineback
Semiconductor Business News
(06/22/01 09:12 a.m. EST)
SAN JOSE -- The downturn in semiconductor equipment orders may be easing and the cycle might be at the "bottom" of the slump, but bookings for new production systems will most likely remain at these low levels for most of this year, according to analysts, responding to new data released on Thursday evening.
North American-based manufacturers of chip production systems posted a slightly improved book-to-bill ratio of 0.46 in May compared to a revised reading of 0.44 for April, said the Semiconductor Equipment and Materials International (SEMI) trade group here. April's book-to-bill reading was the lowest ever posted by SEMI's Express Report (see May 22 story).
For the month of May, SEMI said worldwide orders for North American-based suppliers were $704 million, while tool shipments stood at $1.515 billion, based on a three-month moving average. May's bookings were 3% lower than April's $1.657 billion in orders, and the shipments were 9% below $723 million in April, said the new report.
In releasing the new book-to-bill, SEMI chief executive officer Stanley T. Myers noted that while the ratio moved up slightly, new orders and revenues both declined. He also said it would most likely be nine to 12 months before the semiconductor equipment segment would see "sustained year-over-year improvements in monthly shipments" (see June 21 story).
Many industry observers are also expecting a very slow recovery in capital spending by chip manufacturers. In fact, some semiconductor companies are still scaling back 2001 budgets after tightening their belts in the first five months of this year.
Analysts at Goldman, Sachs & Co. today said they expect to hear claims of a "bottom" to the cycle based on the fact that tool orders dropped only slightly in May compared to a 40% drop in April. Goldman Sachs also noted that frontend wafer fab tool orders down only 1% in May compared to May, while backend chip-assembly systems bookings were 11% lower.
Analysts at the investment firm said the "bottom" in this downturn will resemble a trough, much like the slow recovery in the 1991-1992 period, vs. a "V-shaped" rebound in semiconductor equipment revenues that occurred in 1996 and 1998. |
