SEMI: 2003 comparisons persist, still no visibility

Nov. 24, 2008 – The good news from SEMI’s latest numbers: October’s chip tool demand picture looks to be a big improvement. The bad news: That’s because September was far worse than had been originally calculated. In the end, demand is still in a five-year trough, and signs of a recovery are still beyond sight.

Preliminary bookings in October (a three-month average) were $753.6M, up 16% vs. September but down 36% from Oct. 2007. Billings came in at $990.0M, up 6.8% M-M and down 33% Y-Y. The book-to-bill ratio (B:B) improved slightly to 0.76, meaning $76 worth of orders was received for every $100 worth of product billed.

At first glance, October’s numbers seem improved from recent months — it’s the first M-M increase for both orders and sales since the springtime (see chart). But that’s misleading, because SEMI’s finalized numbers for September are even uglier than thought. More than $100M was pulled out of September bookings (a -14% revision), meaning that orders of $649M touched a low point not seen since Jan. 2002 (was August 2003), and a M-M drop of -25% was last seen in April 2001. SEMI also took ~$63M out of billings (around -6%), resulting in a 13% M-M decline also last seen in mid-2001. And the B:B, originally projected at 0.76, was recalculated to 0.70, also a low point last “achieved” in Sept. 2001.

“While three month average bookings improved in October, overall bookings and billings for North American equipment manufacturers are at levels comparable to 2003,” noted SEMI president/CEO Stanley T. Myers, in a statement.

Ominously, he confirmed that things might not get any better anytime soon: “Our industry will have to look to the early part of 2009 for clearer signals of market direction.”

For the year through October, chip tool sales in North America are running about -25% behind last year’s pace ($11.8B vs. $15.74B), with orders down nearly -32% YTD ($9.73B vs. $14.27B).

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