Despite dour sentiment on semiconductors thesedays, companies that sell equipment used to make chipsreport their business is still growing -- albeit at aslowing rate.
The sector posted a book-to-bill ratio of 1.28 forthe three months ending in June, according to SemiconductorEquipment and Materials International, a trade group.That means that $128 worth of new orders was receivedfor every $100 of product billed.
But while bookings continued to grow, they postedtheir smallest percentage gain since January 2002. Thethree-month average of worldwide bookings in June 2002was $1.16 billion, a sequential gain of 5% overrevised May levels.
The latest number represents a let-up in the paceof growth, after four months of double-digit increasesin bookings.
"Amidst mixed signals about capital spending plansfrom global chip makers, the North American-basedsemiconductor equipment industry has posted severalmonths of incremental billings growth," said StanleyMyers, president and CEO of SEMI, in a statement."While there are concerns about the strength ofimprovements this year, seven months of sequentialbookings growth and our recent industry consensussurvey support expectations for a market rebound in2003 and 2004."
Last week, the trade group said surveys show thatits members -- chip equipment companies -- expectssales of their products to fall 19% in 2002, down fromlast year's $28 billion.
The projected loss comes on the heels of a 41%revenue drop-off last year, the steepest annualdecline in history.
According to the most recent forecast, chipequipment sales should recover and post a 29% gain in2003, followed by a 23% rise in 2004. In a cyclicaldip, the market is projected to flatten in 2005.
However, the group's last forecast proved overlyoptimistic. Back in December, Myersreported that expectations were for the market to be"flat to slightly down in 2002." Instead, it's on track to register a double-digit drop in sales for the second year in a row.
Investors will get a better sense of the near-termoutlook for the sector when chip equipment maker
releases itsfinancial results next Monday, followed by a reportfrom
on Thursday. Bellwether
releases earningsAugust 13.