Equipment Industry Update
-- Semiconductor International, 8/1/2000
Book-to-bill ratios for North American-based semiconductor equipment manufacturers declined for the second month in a row during May, according to data compiled by Semiconductor Equipment and Materials International (SEMI). But with the ratio coming off a record-high level reading set in March, the May number ($1.30 worth of product orders received for every $1.00 shipped) remains extremely strong.Orders to equipment manufacturers increased by a slight 1.3% between April and May, following gains that had averaged 9.3% during the first four months of 2000. Orders for semiconductor equipment have now increased for eight consecutive months. Shipments moved ahead at a healthier 6.2% rate during May, though; so the book-to-bill ratio declined not because of any particularly worrisome trend in orders, but because the solid backlog of orders from previous months pushed the latest month's value of shipments up at an even sharper rate.
This May's shipment total was 31.9% higher than during the final months of 1999, and an extraordinary 73.3% above the May 1999 total. Through the first five months of this year, the value of semiconductor equipment shipped by North American-based manufacturers was 80.9% greater than the $4.99B worth of product shipped during January-May 1999. And at a level of $2.75B during May 2000, orders to North American semiconductor equipment manufacturers were running 68% higher than during the peak of the industry's previous cyclical upturn reached in the fall of 1997.
Worldwide sales for the first three months of this year were 102.9% greater than the total value for January-March 1999. Equipment sales growth in early 2000 was impressive across all regions of the globe. The value of semiconductor equipment sold to North American manufacturers was up a solid 46.0% through three months of this year - but gains in all other regions far exceeded this. Sales to Japan were 84.2% higher this January-March than in the same 1999 period, while sales into the European marketplace were up 149.1%. Equipment sales to the rest of the world (almost exclusively to Taiwan, Korea, Singapore and other nations in the Asia/Pacific region) were more than 2 1/2 times (+156.2%) as high over the first three months of 2000 as during the first quarter of 1999. Nevertheless, over-the-year growth in all regions was marginally less impressive in February and March than in January, so there's good reason to believe we've reached the high point of this growth cycle and expect gains to moderate (to still very healthy levels) over the balance of 2000.
| Table. Equipment Sales Trends by Regional Market | ||||||||
| Billions of U.S. dollars | % Change from a year ago | |||||||
| Total | Projected | Actual | Projected | |||||
| 1998 | 1999 | 2000 | 2001 | 1998 | 1999 | 2000 | 2001 | |
| World | 21.95 | 25.50 | 37.49 | 44.51 | -20.4 | 16.2 | 47.0 | 18.7 |
| Americas | 7.62 | 7.45 | 9.47 | 11.14 | -16.5 | -2.2 | 27.1 | 17.7 |
| Japan | 4.71 | 5.52 | 7.19 | 8.08 | -30.5 | 17.3 | 30.3 | 12.3 |
| Europe | 2.91 | 3.24 | 4.81 | 5.05 | -5.1 | 11.4 | 48.5 | 5.1 |
| Asia/Pacific | 6.71 | 9.29 | 16.02 | 20.24 | -22.1 | 38.4 | 72.5 | 26.3 |
| Table. Price Trends | |
| (% Change in producer prices for May 1999-May 2000) | |
| All capital equipment for manufacturing | 0.7% |
| All semiconductor manufacturing equipment | 1.7 |
| Wafer processing equipment | 1.7 |
| Microlithography | -0.4 |
| Etch and strip | 0.0 |
| Assembly and packaging equipment | 3.3 |
| Parts for semiconductor mfg. machinery | 0.0 |
| Source: U.S. Labor Department |
