Backend equipment orders continue to grow, as the ratio of orders to reported shipments continues to grow as well, according to Semiconductor Equipment and Materials International data.

SEMI reported its monthly book to bill figures for North American based supplies last Friday, the final day of its annual Semicon West trade show. The breakdown of the book-to-bill figures supports the buzz around backend equipment orders at the show.

While the overall ratio of equipment bookings and billings was 0.93, the book-to-bill ratio of backend assembly and test equipment was 1.19. North American suppliers received orders of $209.5 million according to the three-month rolling average, while billings or reported shipment was $175.4 million.

By comparison, front-end equipment orders totaled $510.8 million, while billings totaled $595.1 million, for a ratio of 0.86. Backend order growth has generated a buzz, despite front-end equipment sales remaining depressed, as backend equipment typically servers as a leading indicator in the chip equipment industry.

June marked a 9 percent month-over-month improvement in orders, while billings improved 5.7 percent for backend equipment providers. Backend equipment orders have improved every month this year, SoundView Technology Group analysts observed in a research noted.

"Our thesis has been that semiconductor manufacturers under-invested in backend equipment during the downturn," SoundView analysts Michael O'Brien and Mehdi Hosseini stated. "This, as we have stated, should lead to earlier improvement in ordering activity for final manufacturing equipment like ATE than for the front-end equipment."

Indeed, volume orders for the likes of Teradyne and Agilent from Asian test and assembly subcons generated a lot of interest at Semicon West last week.

"Bookings have increased in every month so far this year and are up 250.3 percent since their bottom of $59.8 million which was reached in November 2001," the analysts said. "This growth off the bottom for the backend group compares favorably to the front-end, which actually set a new bottom this month of $510.8 million, 2.6 percent below the previous bottom of $524.2 million, set in September 2001."

By: DocMemory
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