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Chip-equipment orders rise slightly

Semiconductor equipment orders creep higher in February after getting off to a slow start in 2002, according to a trade group, which says the market picture "has brightened."

Semiconductor equipment orders rose in February, after getting off to a slow start this year.

North American semiconductor equipment makers' book-to-bill ratio inched up to 0.87 in February, according to data released late Tuesday by Semiconductor Equipment and Materials International (SEMI), a trade group.

January 2001's revised book-to-bill ratio was 0.81.

The book-to-bill ratio, published by SEMI, is a three-month average that compares the number of new orders received with the amount of new equipment shipped. February's 0.87 ratio means that $87 worth of new equipment orders were received during the month for every $100 worth of equipment shipped.

Generally, a book-to-bill ratio over 1 indicates that the industry is receiving more orders than it can fulfill--a good sign for manufacturers. Though the ratio has steadily crept up since its low point of 0.42 in April 2001, it has a long way to go to reach 2000 levels. March 2000, for example, saw a 1.46 ratio.

Meanwhile, SEMI's three-month average of worldwide order bookings in February 2002 showed improvement from January. Orders booked rose to $712 million, a 10 percent increase over SEMI's revised $645 million figure for January bookings. However, February's order bookings were still 56 percent below the $1.61 billion in orders seen in February 2001.

But SEMI feels the equipment market is improving, based on greater demand for manufacturing equipment from chipmakers.

"Although the prevailing consensus is that 2002 will be a challenging year, the picture has brightened with recent announcements by some chipmakers of possible upward revisions in capital spending and the incremental acceleration of bookings over the last three months," SEMI CEO Stanley Myers said in a statement.

Analysts agree with the outlook. Several predicted in January that a chip-equipment recovery could begin in the first half of this year, thanks to increased capital spending by large chip manufacturers.

SEMI's three-month average of worldwide billings for equipment in February 2002 was $822 million, a 3 percent increase from its revised January 2002 level. However, it was still 64 percent below the February 2001 levels, where billings reached $2.28 billion.

Overall, worldwide sales of semiconductor equipment in 2001 were $28.1 billion, a 41 percent year-over-year decline from 2000's $47.7 billion in equipment sales, SEMI reported in late February.