Semiconductor Equipment Monitor

The overall book-to-bill ratio for North American-based semiconductor equipment manufacturers declined for the fifth time in the past six months during September, according to data compiled by Semiconductor Equipment and Materials International (SEMI). The ratio reached a peak reading of 1.46 during March, but the September ratio of 1.16 indicates that, even at this stage of the cycle, new monthly orders for semiconductor equipment are outpacing the value of product shipped by 16%.

Orders to equipment manufacturers decreased by a moderate 5.1% between August and September, the first time since September 1999 that a given month's level of orders had fallen below the level of the previous month.

Shipments moved higher by a slight 0.2% during September, following average monthly gains that had averaged 5.2% between April and August. With orders falling at the same time that shipments continue to inch ahead, the book-to-bill ratio dropped to its lowest level since last November.

The estimated dollar value of this September's shipment total was 52.8% greater than during the final month of 1999, and an exceptional 72.8% above the September 1999 total. Through the first three-quarters of this year, the value of semiconductor equipment shipped by North American-based manufacturers was 77.0% greater than the $10.51 billion worth of product shipped during January-September 1999. And at a level of $2.83 billion during September 2000, orders to North American semiconductor equipment manufacturers were running more than 88% above the volume of new industry bookings received during September 1999.

Worldwide sales for the first seven months of this year (the global shipment numbers lag the North American-based data) were more than double the total value for January-July 1999, with sales so far in 2000 running 108.8% ahead of the year-ago pace. Equipment sales growth this year has been impressive across all regions of the globe. We're now projecting that global semiconductor equipment sales during 2000 will exceed $46 billion, an 81% increase over the 1999 total.

There's no longer any doubt that we've moved beyond the peak of this very strong upcycle, but growth continues — albeit at a more moderate rate. Although growth rates should continue on a gentle downslope for the balance of this year, it still seems likely that worldwide global shipments will be about 80% better than during 1999 — which itself was a solid growth year following the almost unbroken downward trend in orders and shipments from the final quarter of 1996 through the first half of last year.