October 22, 2012 - In case anyone needed a reminder or a wake-up, new data from SEMI reiterates chip tool sales are slumping badly in the latter part of this year.
Worldwide orders reported by North America-based manufacturers of semiconductor equipment totaled $952.0M in September, -15% from August's revised $1.12B level, but 2.8% higher than the same month a year ago. Billings similarly were down from August (-12% to $1.18B), but they're also down -10.4% from a year ago.
The first half of the year was pretty good for semiconductor equipment demand, raising hopes of at least some minor full-year growth after a disappointing 2011 (particularly in the fall). It's increasingly clear now, though, that the second half of 2012 is suffering from another investment slowdown. "In the current cycle, device makers are grappling with lower average selling prices and uncertainty with the broader economy, which clearly has a near-term impact on equipment purchases," noted Denny McGuirk, president and CEO of SEMI.
In the four months since peaking in May, equipment bookings have declined -40%, and are now right around where they were in the trough of Sept-Oct 2011, which was a two-year low point. Sales aren't off by as much (-23%) but the dollar amount is also at the 3Q11 trough level. The B:B ratio has been plummeting since April when it was well above the parity level (1.12); it's now at 0.81, meaning $81 worth of product orders are coming in for every $100 of equipment sold.
For the nine months through September, equipment orders tracked by SEMI are down -7% from the same period in 2011 to $11.9B. Sales are down -15% at $12.3B. SEMI's official forecast, originally issued at SEMICON West, predicts an overall -2.6% decline for the year in global frontend + backend equipment.
Industry watchers and chipmakers were expecting a soft 3Q12, but holding out hopes for 4Q12 and especially 2013. Intel didn't help with either timeframe in its 3Q12 results, when it announced lower overall 2012 capex and utilization rates slashed to 50% -- and refused to forecast into 2013 spending due to visibility concerns, just two months away.