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Shipments and Orders for Semiconductor Equipment Decline

Orders for new semiconductor equipment continued to fall in August because of uncertainty in near-term electronics demand, according to trade association SEMI.

SEMI reported that orders for new equipment (bookings in August) declined 8.8 percent to $1.18 billion compared to $1.3 billion in July. Orders also fell 34.8 percent compared to August 2010, when manufacturers received $1.8 billion dollars in new orders.

The amount of equipment shipped (billings) in August totaled $1.48 billion, down 3 percent from July when billings totaled $1.52 billion. The billings figure is 5.1 percent less than August 2010 when billings totaled $1.55 billion, according to SEMI.

Semiconductor book-to-bill continues downward trend in 2011
The book-to-bill ratio for August was 0.80, down from 0.85 in July. A ratio of 0.80 means that equipment manufacturers received only $80 of new equipment orders for every $100 of orders that were shipped in the month. A ratio of less than 1.00 suggests that business is weakening.

“Weaker DRAM demand, foundry spending reductions, and near-term uncertainties about electronics demand are reflected in declining sales trends for new semiconductor manufacturing equipment,” said Stanley T. Myers, president and CEO of SEMI. He noted that SEMI’s three-month billings average is at June 2010 levels.

The declining semiconductor equipment book-to-bill ratio is the latest industry indicator showing a slowdown in the electronics industry. Earlier this week, market researcher Gartner downgraded its semiconductor forecast for the year, saying chip revenue would decline 0.1 percent for the year. Other major market researchers have also downgraded their forecasts. Many say the industry will grow 4 percent this year.