North American orders for semiconductor equipment dropped to the lowest level on record as chipmakers abandoned expansion plans in the global recession.
Orders declined to US$263.5 million last month, down 78 percent from US$1.21 billion in January last year, the trade group Semiconductor Equipment & Materials International said on Thursday in a statement. The orders fell 5 percent from January of this year.
Applied Materials Inc, Lam Research Corp and other chip-gear makers are cutting workers as sales and profit dry up. Tumbling demand for mobile phones, computers and other electronics has forced chipmakers to give up plans to increase their output. Lam said on Thursday it would cut about 10 percent of its workforce to adjust to the slump.
The book-to-bill ratio, a gauge of industry health, was 0.48 last month, meaning chip-equipment producers in North America received US$48 in new orders for every US$100 in products sold. A ratio of less than one signals that the industry is shrinking. The figure has been less than one since January 2007.
Last month’s order total was the lowest since the trade group began keeping records in 1991.
Companies in the industry bill their customers after machinery has been installed and tested. The order and billing figures are based on three-month averages.
Billings totaled US$546.1 million last month, down 58 percent from a year earlier.
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