Sat, Oct 20, 2012 - Page 13 News List

Gloomy outlook for semiconductor equipment makers

By Lisa Wang  /  Staff reporter

The book-to-bill ratio for North American-based semiconductor equipment manufacturers, such as Applied Materials Inc, slipped to a new low last month, re-enforcing expectations of a further decline in the second half of this year amid a weak global economy, semiconductor industry association SEMI’s statistics showed.

The book-to-bill ratio dropped for the fourth consecutive month to 0.81 last month after the three-month average of worldwide bookings contracted 15.1 percent month-on-month to US$952.9 million from August’s US$1.12 billion, according to SEMI’s data.

A book-to-bill ratio of less than 1 indicates falling demand, while a ratio of greater than one indicates growth.

Billings plunged 12 percent month-on-month to US$1.18 billion last month from US$1.34 billion, SEMI’s statistics showed.

“The decline in bookings and billings for semiconductor equipment to levels last reported in the fall of last year further confirms the second-half investment slowdown,” SEMI president and chief executive Denny McGuirk said in a statement.

“In the current cycle, device makers are grappling with lower average selling prices and uncertainty with the broader economy, which clearly has a near-term impact on equipment purchases,” McGuirk said.

US chip giant Intel Corp on Wednesday cut its capital spending forecast for this year to US$11.3 billion from US$12.5 billion on a falling factory utilization rate.

On an annual basis, bookings grew 2.9 percent from US$920 million and billing shrank 10.4 percent from US$1.31 billion, SEMI data showed.

Global spending on wafer fab equipment is expected to drop 13.3 percent to US$31.4 billion this year from US$36.2 billion last year, Gartner Inc forecast earlier this month.

Spending would then slip 0.8 percent to US$31.2 billion next year, before a recovery in 2014 to US$35.9 billion, up 15.3 percent annually, the US-based market researcher said.

“The outlook for semiconductor equipment markets has deteriorated as the macro economy has weakened,” Bob Johnson, research vice president at Gartner, said in a statement dated Oct. 1.

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