Rise in SEMI book-to-bill points to bottom of slump, say analysts
Semiconductor Business News
(08/22/01 10:14 a.m. EST)
SAN JOSE -- New book-to-bill numbers for North American-based suppliers of semiconductor equipment appear to provide more proof that the downturn has hit bottom, according to analysts reacting to data released on late Tuesday.
Orders for chip production tools grew 5% in July from the previous month at North American-based suppliers, said the Semiconductor Equipment and Materials International (SEMI) trade group here. The slight increase in orders coupled with a
continuing decline in tool shipments pushed SEMI's book-to-bill up from 0.56 in June to 0.67 in July (see Aug. 21 story).
The July book-to-bill reading was the third consecutive increase in SEMI's index since the ratio hit its lowest point ever in April at 0.44. While the book-to-bill's rise could be good news for battered chip equipment suppliers, falling shipments underscore the depth of this recession.
Based on a three-month moving average, North American-based suppliers posted a 12% decline in shipments to just $1.14 billion worldwide from $1.29 billion in June. July's shipments were 52% lower than $2.4 billion in the same month last year. Orders were at $764.2 million in July compared to $727.5 million in June, using SEMI's three-month moving average. July's bookings were 74% lower than $2.9 billion in the month last year, said SEMI's Express Report
SEMI officials in San Jose were optimistic but cautious about the gradual rise of the book-to-bill ratio. The new numbers seem to back up a growing consensus that the recession has finally hit a low bottom. The major question, according to observers, is: How long will the bottom last?
Analysts at Prudential Securities Inc. in New York today said the "stabilization" in equipment orders was a "good sign," but they believe a sustainable recovery in bookings is still a few months away.
Frontend equipment orders for July were at $672.5 million, a slight increase over $654.9 million in June, according to the SEMI Express Report, which covers worldwide activities at North American-based suppliers. The book-to-bill for wafer fab frontend tools was at 0.70 in July. In June, the book-to-bill ratio for frontend tools was at 0.60, according to SEMI. A year ago, the frontend equipment book-to-bill stood at 1.28.
Backend chip assembly equipment orders were up significantly in July--$91.7 million vs. $72.6 million, pushing the SEMI book-to-bill for semiconductor packaging tools to 0.53 from a woeful 0.37 in June. A year ago, the backend book-to-bill was above parity at 1.09.
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