IC-equipment orders to fall 25-30% in Q4, says report
By Mark LaPedus, Semiconductor Business News
Oct 2, 2002 (6:48 PM)
URL: siliconstrategies.com
MONTEREY -- Just how bad is the semiconductor equipment industry?
It appears that tool makers have not hit the bottom in the current IC downturn, as the worldwide chip-equipment industry is projected to show a decline of 25-30%--or more--in the fourth quarter of 2002, as compared to the third period, according to a new report from U.S. Bancorp Piper Jaffray of Minneapolis.
“At these estimated levels, we believe the industry will be close to a sustainable bottom for orders, assuming that semi equipment customers are willing to spend 15% of sales on capital,” the report said.
“Orders have fallen off the map,” lamented one chip-equipment vendor at this week's BACUS Symposium on Photomask Technology in Monetary. “I still have a backlog for one product line, but even that's shrinking.”
While most agree that current business conditions are terrible, others believe there is no visibility in the market right now, making it difficult to cast a valid predication for the fourth quarter of 2002 and beyond.
“It's too foggy out there,” said Thomas Blake, vice president of marketing for DuPont Photomasks Inc., a Round Rock, Tex.-based supplier of photomasks.
“We're in a demand driven downturn verses a capacity driven downturn,” Blake said. A possible uptick in Q4 and beyond “will hinge on consumer spending,” he told SBN at the BACUS event.
The prospects look dim for chip-equipment and material vendors, however. “In addition, we believe pushouts/cancellations have emerged recently, which will also drive some misses in top and bottom line results for the September quarter,” according to the report from U.S. Bancorp.
“At the semiconductor device level, a deteriorating demand climate has evolved in the last few months,” according to the report. “Consumer, computer, and communications end markets all appeared to have weakened, with the exception of wireless, which experienced some modest gains,” it said.
“Both back to school and holiday seasonal builds have been essentially absent this year, reflecting the deteriorating consumer demand curve,” the report said. “Additionally, corporate IT departments have kept the lid on spending, further pressuring semiconductor demand,” it added.
And what about 2003? “While we have no evidence to support this yet, we continue to base our 2003 estimates on a modest recovery in orders beginning in the first half of the year followed by modest sequential growth,” according to the report. |
