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Japan's fab-tool book-to-bill sees huge increase

Posted: 24 Jul 2006 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductor equipment? Semiconductor Equipment Association of Japan? SEAJ? XX? XX?

In what could be a possible short-lived boom cycle, Japanese-based semiconductor-production equipment manufacturers experienced a huge jump in bookings for June.

Japanese fab-tool vendors posted a book-to-bill ratio of 1.52 for June, up from 1.16 in May, according to the Semiconductor Equipment Association of Japan (SEAJ).

The three-month average of worldwide bookings in May was $1.5 billion (175.4 billion yen), up 3.7 percent sequentially and up 64.3 percent from the like period a year ago. Billings were $983 million (115 billion yen) in May, down 21 percent sequentially and up 17.5 percent from the like period a year ago.

The boom cycle for Japan's vendors could be a short one. Indeed, the mood was upbeat at the recent Semicon West conference, but industry experts predict a slowdown in the semiconductor equipment and materials sector.

Plus, Intel Corp.'s move to cut capital spending again this year is an ominous sign for the semiconductor-equipment and materials industry, warned an analyst.

In addition to reporting its lackluster financial results on Wednesday (July 20), Intel (Santa Clara, Calif.) also cut its 2006 capital spending budget for the second time this year to $6.2 billion, plus or minus $200 million, down from its April guidance of $6.6 billion, plus or minus $200 million.

"While Intel clarified that half of this cut would come from delays in construction spending, we believe investors will still perceive this capex cut as a cautious sign for the sector in general," said Avinash Kant, an analyst with Canaccord Adams Inc. (Boston).

It's also a concern for Intel's fab-tool suppliers, such as Advantest, Applied Materials, ASMI, ASML, Hitachi, Nikon, Novellus, TEL, Varian, among others.

- Mark LaPedus
EE Times

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