Sat, Jul 21, 2012 - Page 13 News List

Semiconductor sector slows down

By Lisa Wang  /  Staff reporter

The book-to-bill ratio for North America-based manufacturers of semiconductor equipment dropped to below one for the first time since February, indicating that chip makers were cutting equipment investment amid a weak global economy, global semiconductor industry association SEMI said yesterday.

The three-month average of worldwide bookings, or new orders, slipped 9.8 percent to US$1.46 billion last month from May’s US$1.61 billion, SEMI said. The billings rose 1 percent to US$1.55 billion from US$1.54 billion in May.

That brought the book-to-bill ratio to 0.94, meaning that growth in new orders lagged behind the pace of money received, figures considered to herald weakness in the global semiconductor industry.

“Following seven months of increases, the three-month average bookings declined last month and likely reflect a slowing in investment plans attributed to weaknesses in the broader economy,” SEMI president and CEO Denny McGuirk said in a press release.

The downtrend matched a series of financial forecast reductions by global chip companies including Intel Corp, which on Tuesday lowered its revenue growth projection to between 3 and 5 percent this year, from previous growth estimates in the high single digits.

On Thursday, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman and chief executive Morris Chang (張忠謀) also cut his global semiconductor industry revenue growth projection to between 1 percent and 2 percent year-on-year, compared with the more than 2 percent annual growth he estimated three months ago, but Chang said TSMC would keep its capital spending on a high level in the next few years after a record-high spending of up to US$8.5 billion this year.

A majority of the budget would be for next-generation advanced technologies, such as 28 nanometer for this year, and 20 nanometer for next year, he said.

Shares in TSMC fell 1.03 percent to close at NT$76.70 in Taipei trading yesterday, underperforming the benchmark TAIEX’s 0.23 percent rise.

“While order activity may slow, equipment spending this year will continue to be directed towards advanced technologies in wafer processing and packaging assembly,” McGuirk said.

Global semiconductor equipment spending would decrease 2.6 percent to US$42.38 billion this year, from last year’s US$43.53 billion, which was the second-highest level in history, SEMI said earlier this month. Taiwan and South Korea would be the two major areas of growth this year, it said.

Next year, semiconductor equipment spending is expected to resume growth of 10.2 percent to US$46.71 billion. The growth would be driven by strong expansion of the market for tablets, smartphones and other mobile devices, SEMI said.

This story has been viewed 2946 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top