While Japan's chip-production tool purchases surged in the last quarter (in U.S. dollar shipments), Taiwan's consumption of systems nose-dived 44.5% to $1.13 billion in Q1 compared to $2.04 billion in the fourth quarter last year, said Semiconductor Equipment and Materials International (SEMI) here. Taiwan--the hottest market for chip-manufacturing gear in the 1999-2000 boom cycle--fell behind Europe, North America, and even the "rest of world" (ROW) in equipment sales during the first quarter, said SEMI's new report (see table below).

The San Jose-based trade group released it quarterly shipment numbers for the world's chip equipment markets while cutting its 2001 forecast to show a 27% decline in total revenues (see today's story).

SEMI said North American lost its top spot to Japan in the first quarter with a 23.7% sequential decline in tool purchases to $2.97 billion compared to 3.90 billion in Q4, said the new SEMI report.

The last time Japan was the largest semiconductor equipment market was in the third quarter of 1996, said SEMI analyst Elizabeth Schumann, director of industry research and statistics for the trade association. "During most of the early and mid-1990s North America and Japan markets were running neck-and-neck as the top equipment market in the world. After the end of 1996, North America pulled away as the largest market," she said.

In the first quarter of 2001, only Japan and Korea showed gains in equipment revenues compared to Q4 2000. Some observers have noted that Korean and Japanese chip makers lagged Taiwan, North American and European companies in investing during the boom of 1999 and 2000. Taiwan has been hit hard by the sudden collapse of the foundry business, and North American chip companies were most impacted by the slowdown of the U.S. economy and Internet craze.

Japan's fiscal year, ending on March 31, also played a factor in the first quarter being stronger for equipment purchases in the Q1 calendar period, Schumann noted.

The ROW category was given a boost in the first quarter by China's buildup of semiconductor factories--both new foundry ventures and backend assembly plants.

Regional scorecard on chip equipment sales

Region	Q1 2001	Q4 2000	% change	Q1 2000	% change (year-to-year)
Europe	$1.58 billion	$1.87 billion	-15.7%	$1.39 billion	+13.6%
Japan	$3.37 billion	$2.56 billion	+31.7%	$2.18 billion	+56.8%
North America	$2.97 billion	$3.90 billion	-23.7%	$2.36 billion	+26.1%
Korea	$1.03 billion	$900 million	+13.4%	$820 million	+25.3%
Taiwan	$1.13 billion	$2.04 billion	-44.5%	$2.30 billion	-50.8%
ROW	$1.17 billion	$1.60 billion	-27.1%	$1.10 billion	+6.7%
Total	$11.25 billion	$12.88 billion	-12.7%	$10.14 billion	+10.9%
Source: SEMI