OCTOBER 25--The composite book-to-bill ratio for North American-based semiconductor-equipment manufacturers plunged between August and September--the fourth consecutive month of retreat for this important, forward-looking indicator. According to the most recent survey conducted by Semiconductor Equipment and Materials International (SEMI; www.semi.org), the book-to-bill ratio declined from a revised level of 1.02 in August to a reading of 0.84 during September. This tells us that for every $100 worth of equipment shipped during the month, an estimated $86 worth of new orders were received by manufacturers. During September 2001, the book-to-bill measure stood at 0.64%--not too far above the record-low level of 0.44 recorded during April of 2001. This September's ratio represented the first sub-1.00 book-to-bill reading since February of this year. So the encouraging market momentum that began to build during the spring and early summer of this year was waning as we moved into the fall of 2002.
But after an encouraging seven-month run of improved orders, bookings eased during both August and September of this year. Preliminary data for September 2002 showed bookings declining by 19.1% from their revised August level, following cumulative gains of almost 60% during the first six months of the year. Billings fared slightly better, falling by a mere 1.0% between August and September¾thanks, in large part, to pass-through on the accumulation of new orders placed over the first half of the year.
The value of equipment shipped by North American manufacturers has now fallen below
$1 billion for 13 consecutive months. But September 2002 billings were actually worth an estimated 2.5% more than during the same month a year earlier, when the industry was in a tailspin and problems were exacerbated by the anxiety and loss of confidence that immediately followed the terrorist attacks on New York and Washington. And the $822.6 million worth of new bookings received this September was 34% greater than the level of bookings reported during September of 2001, so there's clearly still more work in the pipeline now than there was a year ago. The modest (2.5%) September 2001-to-September 2002 increase in billings was the very first over-the-year gain recorded by the semiconductor equipment industry since March of 2001.
SEMI also has compiled global sales data covering trends for the rest of the world through the first eight months of this year (just a one-month lag from the North American market data). Through August of 2002, global semiconductor equipment sales were worth approximately $12.08 billion¾about 45% less than the $21.99 billion worth of equipment sold worldwide during the first two-thirds of 2001.
Compared to 2001's eight-month totals, equipment sales to the Asia-Pacific market (excluding Japan) during the first two-thirds of this year were off the least severely (-25.6%), while sales into the North American market were 45.1% lower during January-August of 2002 than over the first eight months of 2001. Much steeper equipment sales declines were recorded in both the Japanese (-61.7%) and European (-58.1%) markets during the first two-thirds of this year.