September 21, 2012 - Demand for chip tools fell again in August and is off by -30% from its peak in early summer, fulfilling fears that the second half of 2012 will be sluggish for chipmaking investments, according to the latest data from SEMI.

North America-based manufacturers of semiconductor manufacturing equipment reported $1.12B in orders worldwide in August (a three-month moving average), down -9.2% from July's slightly downwardly revised level of $1.23B and down -3.6% from a year ago. Worldwide billings slipped to $1.34B, off by -7.4% from a similarly lowered mark in July and off by -8.4% from the same month in 2011.

For the year through August, chip tool bookings are running about -8% off the same pace in 2011 ($10.97B), with billings off by about -15% at $11.16B, according to SEMI's historical data. Demand clearly peaked in the spring, flattened in the summer, and has now waned significantly. Global demand for semiconductor manufacturing equipment actually started slipping in 2Q12 with softness in just about every region except Taiwan. (As bad as the current pullback is, it's a far cry from the -40+% dropoff seen toward the end of 2011.)

"The second half of the year continues to show reduced order and billing levels for the 2012 spending cycle," said Dan Tracy, senior director of SEMI Industry Research and Statistics. Industry watchers already were expecting a pullback in demand especially in 3Q12 (and so are the chipmakers themselves), with mixed feelings about a possible bump in 4Q12.

SEMI's still sticking with its official forecast issued at SEMICON West which predicts a -2.6% decline for the year. "We expect 2012 equipment revenues to decline slightly with total spending for front-end and back-end semiconductor equipment globally remaining at the $40 billion or greater level for the third consecutive year," reiterated Tracy.

SEMI is growing increasingly bullish, however, for 2013, with initial projections of 17% growth in equipment spending.

	Billings	Bookings	Book-to-bill
March	1,287.6	1,445.7	1.12
April	1,458.7	1,602.8	1.10
May	1,539.3	1,613.7	1.05
June (f)	1,535.7	1,424.3	0.93
July (r)	1,442.8	1,234.6	0.86
August (p)	1,335.5	1,120.6	0.84

Semiconductor bookings and billings, 3-month averages. (Source: SEMI)