Chip and equipment book-to-bills jumping up, says VLSI Research
By Peter Clarke
Semiconductor Business News
(12/18/02 08:35 a.m. EST)
siliconstrategies.com
SAN JOSE, Calif. -- The book-to-bill ratios for semiconductor manufacturing equipment and for integrated circuits, as calculated by market watcher VLSI Research Inc., are both rising with the latter breaking through the 1.0 threshold. The equipment book-to-bill is not quite there yet but against previous expectation is expected to hit 1.0 in December, promising better times to come in 2003 for the makers of chip-making equipment.
The book-to-bill ratio for semiconductor manufacturing equipment stood at 0.92 in November, up from 0.86 in October, according to San Jose-based VLSI Research with bookings of $2.79 billion and billings of $3.02 billion.
This represents a significant improvement on the predictions of one month ago when it was said that things could go from bad to worse in November, with predicted bookings of $1.84 billion and predicted billings of $2.15 billion (see November 20 story). Those numbers suggested a falling November book-to-bill to 0.85 rather than the strongly rising book-to-bill shown by the market research firm's latest preliminary numbers.
VLSI Research did not explain its missed prediction except to say that order activity has picked up in the equipment business, especially from the major independent device manufacturers. The company is forecasting bookings of $2.532 billion and billings of $2.540 billion in December 2002.
The November billings divided between $1.75 billion for wafer processing equipment, $680 million for test and related equipment, $220 million for assembly equipment and $370 million for service and spares, the company said.
A book-to-bill ratio is generally taken as a forward indicator with a ratio above one pointing towards growth to follow and a ratio below one indicating imminent market contraction.
VLSI Research also calculates a book-to-bill ratio for the integrated circuit market based on market data available from World Semiconductor Trade Statistics and its own estimates.
For ICs, the rolling three-month average of the book-to-bill ratio rose to 1.01 in November. Worldwide bookings were at $11.08 billion and billings were at $10.96 billion, the company said. The IC book-to-bill ratio is expected to increase to 1.04 in December, when bookings are forecasted at $11.26 billion and billings are predicted to be $10.83 billion.
In addition, VLSI Research said that front-end capacity utilization is turning out much better than previously estimated. It reached 82.7% in November, which is higher than a previous forecast of 79%. Still, utilization rates have been on a downward slide since the peak of 87% in June as chipmakers continue to cut production to raise prices. The fab utilization rate for December is predicted to be 80.8%. |
