Worldwide October equipment book-to-bill drops to 0.86 - The Fab Line - Brief Article

Electronic News, Dec 2, 2002

WORLDWIDE EQUIPMENT BILLINGS amounted to $2.2 billion in October and bookings were at $1.9 billion, resulting in a book-to-bill ratio of 0.86, according to a report from VLSI Research Inc. That represents a sequential dip in billings of 30 percent and represents the lowest revenue VLSI has recorded in the second half of 2002. Meanwhile, October's billings were 15 percent higher than the September 2001 level. Of the total billings in October, $13 billion were for wafer processing equipment, $440 million for test and related equipment, $120 million for assembly and $340 million for service and spares. VLSI expects the worldwide book-to-bill ratio to remain unchanged for November. VLSI's worldwide book-to-bill ratio for capital equipment should not be confused with that published by Semiconductor Equipment and Materials International (SEMI), which only encompasses North American tool suppliers.

Meanwhile front-end capacity utilization has been sliding down from the peak of 87 percent in June, and that won't change any time soon, according to the market researcher. Utilization was at 84 percent in October and VLSI expects to see it drop to 79 percent when November's numbers come in as IC makers continue to cut production to raise prices. At the same time, companies are adding capacity inexpensively by converting existing capacity to tighter CDs--but not production--and relying on equipment discounts, pushing order cancellations and then rebooking at lower prices, VLSI said.