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Equipment Orders Fell in February
Online Staff -- Electronic News, 3/16/2006
The global chip equipment industry closed February in a healthy state, with a Book-to-Bill ratio of 1.24, despite bookings and billings both down sequentially, according to a report today from Santa Clara, Calif.-based VLSI Research Inc.
Worldwide equipment bookings for February fell 15 percent sequentially to $4.67 billion, but remained robust, registering a year-over-year growth of 42 percent, according to the Silicon Valley market research firm.
Worldwide billings, or shipments for which revenue is recognized, dropped 12.5 percent from January to $3.75 billion. The resulting book-to-bill ratio was 1.24. A ratio of more than 1.00 suggests that current demand is ahead of supply, which indicates probable near-term growth.
The equipment industry is turning out unusually strong for this time of the year, according to the market researcher. VLSI Research even revised the January data published last month. Both bookings and billings were revised upwards from $5.1 billion and $4.2 billion, respectively.
Chipmakers believed that 2005 would be flat. With the exception of a few, many chipmakers kept their capital spending flat and under-invested in equipment. As utilization rates increased, companies rushed to buy equipment, which is evident in the strong bookings growth, said VLSI
Utilization rates did not cool off as expected in February, VLSI said. Front-end utilization hit almost 93 percent, 1.5 percentage points above the previous month’s level. Test and assembly were at 95 percent, also above January levels.
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