SAN JOSE -- Worldwide shipments of chip production systems by North American-based suppliers dropped at a faster rate than incoming orders in June, according to a new book-to-bill report released by the Semiconductor Equipment and Materials International trade group here.
As a result, SEMI's book-to-bill for North American-based tool suppliers buoyed up slightly to a reading of 0.54 in June from a revised 0.48 ratio in May.
"While the book-to-bill ratio improved slightly in June, total shipments and orders continued to decline," noted Elizabeth Schumann, director of industry research and statistics for SEMI. "Some specific equipment categories are showing modest improvement, which could be an indication that the industry is nearing the trough of the orders cycle."
However, she noted that most equipment suppliers participating at last week's Semicon West trade show in San Francisco and San Jose said market visibility remained extremely poor in the current downturn. Therefore, the San Jose-based trade group is hesitant "to declare a reversal in order trends just yet," Schumann said.
SEMI's three-month average of worldwide equipment bookings in June was $704.7 million, a decline of 1% from $714 million in May and a drop of 75% from $2.86 billion in June 2000. The three-month average for billing in June was $1.31 billion, a 12% decline from $1.49 billion in shipments during May and 42% below $2.26 billion in June 2000, according to the report, which was released by SEMI on Monday evening.
During the Semicon West trade show, projections for growth in semiconductor capital spending were cut by SEMI, industry analysts, and suppliers. SEMI's mid-year consensus forecast now shows a 35% drop in semiconductor equipment sales to $31 billion in 2001 from $47.7 billion last year (see July 18 story).
Concerned about the duration of the downturn, Applied Materials Inc. last week also lowered its industry forecast for wafer-processing equipment. The company said it now expects that tool segment to drop 30% from $33 billion last year, and Applied officials are worried about new delays for 300-mm wafer systems (see July 16 story).
Later at a press conference last week, Applied Materials chairman and chief executive James C. Morgan said many of the new tool orders are sitting on the desk of semiconductor CEOs, waiting for a final signature.
"The issue our customers are facing--with their business being difficult--is deciding exactly when to make that investment," Morgan said. He said chip makers are facing three waves of pressure--the movement to 300-mm wafers, device shrinks, and use of new materials, such as copper and low-k dielectrics.
"With the economic outlook, can they hold off?" he asked journalist during the Semicon West press conference. "That puts a lot of pressure on us because then all of them are going to make their decisions to move ahead and order systems at the same time."
