Semiconductor equipment bogged down!

NEW TRIPOLI, USA: Rises in the book-to-bill ratio by North American and Japanese semiconductor equipment manufacturers is giving hope that the downturn has bottomed out. BUT HAS IT asks the report: “The Global Market for Equipment and Materials for IC Manufacturing,” recently published by The Information Network.

SEMI reported this week that North America-based manufacturers of semiconductor equipment shipped about $391.9 worth of equipment in May 2009, about 1 percent more than April 2009, but 72 percent less than May 2008.

Japan-based manufacturers of semiconductor equipment registered billings in May 2009 of 39.2 billion yen ($409.7 million). The billings figure is 3.2 percent down from April 2009 and 68.7 percent down the May 2008 billings level.

While North American manufacturers posted a 1 percent increase while the Japanese manufacturers posted a 3.2 percent decrease in billings.

Keep in mind that North American billings numbers are “preliminary” and usually drop when the final figures are published a month ago. March billings were reported in April at $455.3 million and revised down to $438.3 million a month later.

April billings were reported in May at $389.9 million and revised a month later at $385.7 million.

To complicate matters, we are now hearing that a significant amount of capacity is entering the market because of the downturn. Qimonda’s bankruptcy can add 120,000 300mm wafer starts per month in used equipment bought by semiconductor manufacturers.

Add to that equipment from other troubled memory manufacturers such as Powerchip and ProMOS, and a total of 400,000 wafer starts a month are possible. The latest SICAS repot shows that in Q1 2009, 300mm capacity was 433,000 wafers starts per week. So, this excess capacity on the market represents 25 percent of the capacity.

“Our proprietary leading indicators, which determine inflection points in economic activity and which we utilize to show turning points in semiconductor equipment sales have turned positive, indicating that an upturn in equipment sales will begin by October, not now (see below),” noted Dr. Robert N. Castellano, president of The Information Network.

“We have been using these indicators since 2000 and they have proven to be highly quantitative metrics in every forecast we have given, and in nearly every given year we have not had to change our forecast midstream. We do not give forecasts in tenths of percentages only to change them two months later.”