The book-to-bill (BB) ratio for North America-based semiconductor equipment manufacturers, such as Applied Materials Inc, dropped below one ¡ª to 0.94 ¡ª last month for the first time in the past 11 months, industry association SEMI said.

The three-month average of worldwide bookings was US$1.17 billion in orders last month, down 12.68 percent from the August bookings of US$1.34 billion, SEMI said in a statement issued on Monday.

As the three-month average of worldwide billings also fell 3.3 percent to US$1.25 billion, the book-to-bill ratio fell to 0.94 last month from 1.04 in August, the association said.

A ratio of 0.94 means that US$94 worth of orders were received for every US$100 of product billed during the month. The ratio is used as an indicator of the outlook for the future market in the semiconductor industry, with a ratio of above one implying a more optimistic outlook, while a ratio of less than one shows weakness.

¡°Following 11 months of above parity book-to-bill ratios, the three-month average ratio declined in September,¡± SEMI chief executive officer and president Denny McGuirk said in a statement.

The book-to-bill ratio for North America-based semiconductor equipment manufacturers has been declining sequentially in the months since June, SEMI said.

¡°While order activity moderated, equipment spending this year is expected to be robust and remain on pace for double-digit year-on-year growth,¡± McGuirk said.

Last month¡¯s bookings figure is 18.1 percent higher than the level of US$992.8 million seen a year earlier, while the billing figure is 22.5 percent higher than September last year¡¯s level of US$1.02 billion, according to the association¡¯s tallies.

The latest book-to-bill ratio is evidence of broad-based market concerns about an inventory correction in the global semiconductor industry, but analysts believe the industry¡¯s positive fundamentals are intact and some players may fare well this quarter due to the launch of new smartphone and tablet products.

Deutsche Bank said in a recent note that Taiwanese companies like Taiwan Semiconductor Manufacturing Co (TSMC, ̨·eëŠ) and Advanced Semiconductor Engineering Inc (ÈÕÔ¹â), for instance, would still see modest sales growth this quarter due to their increasing exposure to Apple Inc¡¯s new products and fast ramp-up of production using the 20-nanometer process technology.

Separately, GlobalFoundries Inc¡¯s latest purchase of a chipmaking unit from International Business Machines Corp (IBM) for US$1.5 billion would not have much impact on TSMC, as IBM has been losing market share in the past few years, JPMorgan Securities Ltd analysts, led by Gokul Hariharan, said on Monday.

¡°Given that TSMC and Intel Corp develop their own leading edge processes, and invest heavily in process research and development, we see limited impact from this acquisition, but there could be some risk for smaller foundries who used to license technologies from IBM or the Common Platform Alliance,¡± JPMorgan analysts said in a client note.

TSMC said recently that its capital spending this year would amount to US$9.6 billion and that it had budgeted more than US$10 billion for next year, mostly in 16nm and 10nm technologies.

By: DocMemory
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