Fab equipment orders disappoint, puzzle analysts
Analysts tracking semiconductor equipment and capital spending are surprised by the weakness in new orders for wafer fab tools at North American-based suppliers, based on the latest SEMI book-to-bill report released on Tuesday evening.
The book-to-bill rose from 0.77 to 0.81 in January, with bookings increasing slightly by 1.3% last month from December and billings dropping sequentially by 4.3%, said the Semiconductor Equipment and Materials International (SEMI) trade group. Based on a three-month average, bookings for North American-based tool suppliers were at their lowest point since nearly the middle of the 1990s (see Feb. 19 story).
With their attention focused on the coming months and quarters, financial analysts now appear to be concerned about the weaker-than-expected orders for chip-making tools--especially in the wafer-processing frontend sector. In newsletters e-mailed to subscribers, analysts generally said they were puzzled by the lack of growth in frontend tool orders because of encouraging remarks recently made by leading U.S.-based suppliers, including Applied Materials Inc. Last week, Applied's top executives said orders were stronger than expected in the last three months, and they predicted a 10-to-15% sequential increase in orders during the current fiscal quarter (see Feb. 13 story).
But also rubbing industry observers the wrong way was the fact that bookings for previous months were revised down by SEMI and yet January orders were still almost sequentially flat. The bright spot in the North American semiconductor equipment industry was backend assembly and chip-packaging tools, which saw bookings surge 50% to $130 million in January (based on a three-month average) from a pitiful $87 million in December.
"January marks the second consecutive month in which bookings for the final manufacturing equipment segment increased significantly from its previously weakened state," said Stanley Myers, president and CEO of SEMI in San Jose.
But the frontend tool segment was surprisingly weak, according to analysts reacting to Tuesday's report. Frontend bookings at North American-based suppliers slipped 6.4% to about $507 million in January vs. $542 million in December, the SEMI Express Report said. Overall, equipment orders were $636.9 million in January, a 1.3% increase from $628.5 million in December, using the trade group's three-month moving average. Bookings were 66% below $1.85 billion in January 2001.
Billings (shipments of systems) tracked lower in the frontend tool segment to about $649 million in January, a 5.4% sequential drop from December. Billings in the backend systems segment were up 1.3% to about $135 million, using the three-month average. The frontend book-to-bill was lower than the backend in January at 0.78 vs. 0.97 (the reverse situation from most of the downturn in 2001 and late 2000). |
