VLSI: September book-to-bill tells a tale of two markets

According to new data from VLSI Research, semiconductor equipment numbers remain unsteady, but ICs keep chugging along.

Worldwide manufacturers of semiconductor equipment posted a book-to-bill ratio of 1.02 in September, up from August’s revised 0.94 and equaling July’s 1.02, according to VLSI. August’s book-to-bill had originally been estimated at 1.00, which would have made September the third consecutive month at or above parity.

Equipment manufacturers posted bookings of $3.47 billion and billings of $3.39 billion in September, up considerably from August’s revised totals of $2.00 billion and $2.12 billion. Of the total billings, $1.81 billion were for wafer-processing equipment, $863 million for test and related equipment, $256 million for assembly, and $461 million for service and spares. The first two categories were down slightly in September, after being substantially higher from July to August. However, assembly and service and spares, which were both lower in August, saw significant month-to-month gains in September (79% and 57%, respectively).

“The September B:B ratio represents a significant improvement,” stated VLSI, “but the big picture shows it is holding flat.” September’s bookings were identical to March 2003, and August’s bookings were below that of May, indicating that “the order momentum is gone,” VLSI warned.

If the environment seems cloudy for semiconductor-equipment makers, the skies continue to brighten for chipmakers. The three-month average of worldwide IC bookings in September achieved its highest level in 2003 at $13.60 billion, up 11% from August’s $12.18 billion and up 43% from September 2002. Worldwide IC billings were at $12.20 billion, compared with $11.08 in August and $10.29 billion in July. The three-month IC book-to-bill ratio rose to 1.11 in September, up from August’s 1.08.

Overall, front-end capacity utilization topped 90.3% in September, up from a revised 86.3% in August and 85.4% in July. Utilization was near 95% for 130nm and below.

VLSI’s forecast for the equipment industry remains unchanged: 2003 revenues of $30.2 billion, a 1.8% improvement from 2002, and 2004 revenues of $35.6 billion, a 18.0% gain from this year. But once again VLSI has raised its IC revenue projections, from $135.6 billion in 2003 to $137.3 billion (a 14% improvement from 2002), while 2004 revenues are now projected to rise 22.1% to $167.7 billion.


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