Semiconductor equipment orders down 75 percent

North American semiconductor equipment manufacturers posted US$742 million in orders booked in August, down 75 percent from a year earlier, industry group Semiconductor Equipment and Materials International (SEMI) said in a report issued Thursday.

Meanwhile, the manufacturers shipped $1.2 billion worth of semiconductor equipment in August, according to SEMI's preliminary figures for the month, giving the companies a "book-to-bill" ratio of 0.61, meaning that $61 worth of new orders were received for every $100 of product shipped.

The SEMI figures are actually an average over three months. The August figures were produced by combining June, July and August numbers and dividing by three to adjust for "spikes" in the monthly numbers. Order cancellations are figured in to the numbers.

Although the shipments have declined steadily since March, they appeared to flatten out in August, according to SEMI. Shipments were virtually unchanged between July and August, at approximately $1.2 billion in each month.

The order figures have been more volatile, but in the six-month period ending in August, April had the lowest orders, with only $721 million in orders. August had less orders than July, but more orders than June.

However, even prior to the terrorist attacks in the U.S. last Tuesday, the industry was not reading into the figures a prompt recovery in the industry, said Michael Droeger, a spokesman for SEMI. "In general, people are cautious about looking at an increase in orders as a sign of recovery," Droeger said. "It appeared that we were hitting a bottom of some sort, but we think that this bottom might continue for a while." To further taint the litmus test, August has never historically been a strong month for the industry, Droeger said.

Now the semiconductor industry has to wait and see how the increased uncertainty from those attacks is going to affect orders, he said. "We have to see how it affects consumer purchases and business purchases, whether companies will increase orders or just stay with the curve," he said.

However, the signs in the overall economy haven't given the industry confidence, Droeger said. "Nobody is going out and buying things," he said. "Even the last week and a half of people holding back on major purchases has had an effect on the economy," he said.

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