Chris Kraeuter
Semiconductor-equipment orders rose 10% in August, while a key industry ratio moved above parity for the first time in a year, according to data released Tuesday by a trade group.
The new data were played down partly because most of the improvements originated from the back-end of the manufacturing process, which comprises only one-third of the overall equipment industry. "While the wafer processing equipment segment has yet to see the same growth levels as the final manufacturing segment, our industry views the overall trend as a positive indicator," said Stanley Myers, CEO of Semiconductor Equipment & Materials International, in a press statement. Likewise, Dan Tracy, SEMI's senior director of research and statistics, confirmed that front-end bookings "still reflect a cautious market." The book-to-bill ratio, which measures orders received vs. product shipped, was 1.05 to 1 in August, based on preliminary data. For July, the final ratio was 0.93 to 1; in August of last year, the ratio was 1.01 to 1. It was one year ago when the equipment industry began to feel the impact of a growing inventory bulge at its customer base. The inventory was finally worked down in the early months of this year, but most chipmakers have remained fairly cautious regarding expanding their factories. There are increasing signs that this caution is abating, though. SEMI's data have reflected steady order rates for the previous three months and a book-to-bill ratio that has been edging higher every month since February. Most industry watchers have expected the final months of the year and the early part of next year to show more robust demand from semiconductor companies. This sentiment was echoed late last week by Applied Materials(AMAT Quote - Cramer on AMAT - Stock Picks) CEO Mike Splinter, who cited back-to-school demand for electronics gear that seemed "reasonable" and increasing semiconductor factory utilization.
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