Drop in Q2 semicon equipment bookings

Worldwide semiconductor equipment bookings for the second quarter of this year fell 18 per cent compared to the same period last year, latest data from industry group SEMI reveal.

The semicon equipment manufacturer trade association reported that semicon equipment bookings totalled US$10.22 billion for the second quarter, down 4 per cent from the first quarter of 2007.

Echoing the trend of declining orders for semiconductor equipment, SEMI also reported last week that its latest figures for semiconductor equipment bookings for North America for July 2007 were also down. The three-month average of equipment bookings in July 2007 for North American semicon equipment manufacturers totalled US$1.44 billion, down 10 per cent from June 2007's level of $1.61 billion and was 17 per cent less than US$1.73 billion in July 2006.

However, worldwide equipment billings for the quarter grew 15 per cent to US$11.06 billion, which was also 3 per cent higher than the first quarter of this year.

While the overall equipment market billings grew, China and Taiwan were the only two countries which registered quarterly sequential growth in semiconductor billings, with the rest of the regions reporting a decline in billings. Equipment billings in China grew 87 per cent from US$0.65 billion in Q1 2007 to US$1.21 billion in Q2 2007, while Taiwan grew from US$2.01 billion in Q1 2007 to US$3.16 billion in Q2 2007.

The semiconductor equipment market was worth some US$40.47 billion last year, of which the South-east Asia region, including Singapore, accounted for about US$3.71 million.

SEMI's latest figures follow the Semiconductor Industry Association's (SIA) report earlier this month, which showed that worldwide sales of semiconductors for the first half of 2007 grew 2 per cent from the same period last year, reaching US$121 billion. More importantly, SIA noted that while sales were up over 2 per cent, total unit shipments increased almost 7 per cent, attributing the situation to rapid price attrition in certain semiconductor market segments.

In May this year, research house Gartner revised its worldwide semiconductor revenue forecast down by almost 4 percentage points, from a revenue increase of 6.4 per cent down to an increase of 2.5 per cent this year, to reach some US$269.2 billion. It attributed the revision to fiercer-than-expected price competition in the processor segment, as well as a fall in average selling price in DRAM chips.

In Singapore, companies in the semiconductor industry have seen their second quarter earnings suffer from the slowing demand. Chip testers United Test and Assembly Centre and STATS Chippac have reported lower profit for the second quarter, while semiconductor foundry Chartered Semiconductor Manufacturing dived into a loss for the quarter, compared to a profit a year ago.

But some 34 per cent of the local semiconductor industry are still predicting better business conditions for the second half of this year, according to the Economic Development Board of Singapore's (EDB) latest results from its business sentiment survey. This however, is down from the 38 per cent who were predicting better business conditions a quarter ago.

Earlier in June, EDB said that while Singapore's electronics manufacturing output contracted 0.7 per cent in June, compared to the same period last year, output of semiconductors grew 13.8 per cent and helped to negate the fall in production recorded by the other electronic products within the electronics cluster, such as computer peripherals, data storage and consumer electronics.