IC-equipment execs see spending recovery
Mark LaPedus
07/21/2003 11:55 AM EST
SAN JOSE, Calif. -- Capital spending in the semiconductor industry is slowly bouncing back this year, with signs of an expenditure boost in late-2003 or early-2004, according to analysts and executives in the semiconductor equipment industry.
In a mid-year survey conducted by IC Insights Inc., for example, chip makers plan to raise their forecast for capital spending to 8 percent in 2003 over 2002, up from the original target of 6 percent.
Bill McClean, president of Scottsdale, Ariz.-based IC Insights, projects that the actual capital spending figure will hit $29.5 billion in 2003, up 10 percent over 2002.
The real boost in spending is projected to take place in 2004. "We are still hopeful of a modest improvement in spending in the second half of 2003, leading into a strong 2004," according to a report from SG Cowen Securities Corp. of New York today (July 21).
Others are also positive in a down market, especially one semiconductor-equipment vendor. In fact, there are "8 to 10" new and major fab projects waiting in the wings for fab-tool providers, said Mary Puma, president and chief executive of Axcelis Technologies Inc., a chip-equipment vendor based in Beverly, Mass.
Many of these big fab projects should be realized "at the end of this year and extending into next year," Puma said during a panel discussion at the Semicon West trade show last week.
There is good and bad news for the semiconductor equipment industry, however. North American-based manufacturers of semiconductor equipment posted a book-to-bill ratio of 0.93 for the month of June, up from 0.90 in May, according to figures released on Friday (July 18) by the Semiconductor Equipment and Materials International (SEMI) trade group.
Bookings for the industry were flat, as the industry recorded a figure of $720 million in June, down from $724 million in May. Front-end wafer processing equipment fell 4 percent in June over May, and decreased 17 percent year-over-year, according to SG Cowen.
But backend equipment posted a gain of 9 percent in June over May, and a healthy 32 percent jump year-over-year. "This is consistent with signs of a gradual order recovery in test and assembly," according to SG Cowen.
Executives in the test and assembly industry are not so sure about the indicators, however. "The empirical data shows that the backend is supposed to lead the recovery. I am puzzled by that," said C. Scott Kulicke, chairman and chief executive of Kulicke & Soffa Industries Inc., a supplier of IC-packaging equipment in Willow Grove, Pa.
In an interview with SBN at last week's Semicon West show, Kulicke said the "body language" among customers is improving, but the order rates in the IC-packaging and assembly business are "spotty."
Visibility is still cloudy, but the market for IC-test equipment "is better than a year ago," said Nick Konidaris, president and chief executive of Santa Clara, Calif.-based Advantest America Inc., the U.S. arm of Japanese ATE giant Advantest Corp. One indicator is that the IC-test market is beginning towards a period of "more capacity buys," he told SBN at Semicon West.
The mood is more cautious on the front-end of the fab-tool market, "People are very cautious about adding capacity after what happen a year ago," said Michael Splinter, chief executive of Applied Materials Inc., the chip-equipment in Santa Clara, Calif. Splinter was referring to a similar pick up in demand in the first half of 2002, which turned out to be a false alarm.
Others agree that the market is improving, although the evidence is not clear that a recovery is just around the corner. "There are good signs, but show me the money," said Don Mitchell, chairman and chief executive officer, at FSI International Inc., a chip-equipment maker in Minneapolis, Minn., during a panel discussion at Semicon West. |
