Worldwide Semiconductor Manufacturing Equipment Billings increased 61% to US$12 billion in 1Q’11

Worldwide semiconductor manufacturing equipment billings reached US$12 billion in the first quarter of 2011. Billings were 1% higher than in 4Q’10 and 61% above the same quarter a year ago.
Worldwide semiconductor equipment bookings were US$11.08 billion in the first quarter, according to SEMI. The figure is 18% higher than the bookings during the same quarter of 2010, but 11% lower than the level in the prior fourth quarter.

Worldwide Semiconductor Capital Equipment Spending to Grow 10.2% to $44.8 billion in 2011

Worldwide semiconductor capital equipment spending is on track to reach $44.8 billion in 2011, a 10.2% increase from 2010 spending of $40.6 billion, according to Gartner, Inc. However, analysts warned that a looming semiconductor inventory correction, combined with oversupply in foundry, will lead to a slight spending decline in 2012.
"Capital spending and the equipment picture have changed little since our last forecast in the first quarter of 2011, in spite of the disastrous earthquake in Japan, which threatened to disrupt the electronics supply chain," said Klaus Rinnen, managing vice president at Gartner. "Thanks to herculean efforts by Japanese vendors, the effects of the quake were minimized."
All segments of the semiconductor capital equipment market are expected to experience growth in 2011. Gartner analysts said 2011 spending is being driven by aggressive foundry spending, integrated device manufacturer (IDM) logic capacity ramping up at the leading edge, and memory companies gearing up for double patterning. Semiconductor capital equipment spending in 2012 will see a 2.6% decline, followed by 8.9% growth in 2013. The next cyclical decline should begin in late 2013, as the impact of memory oversupply takes its toll.
As semiconductor growth continues, worldwide wafer fab equipment (WFE) revenue is expected to grow 11.7% in 2011. Intel, foundry and NAND spending will drive the need for leading-edge equipment, thus benefiting immersion lithography, etch, and certain segments in deposition involved in double patterning and critical leading-edge logic processes.
Worldwide packaging and assembly equipment (PAE) revenue is expected to experience the smallest growth in 2011 at 3.6%. Back-end manufacturers realized sizable growth in 2010, but the market began to slow in the fourth quarter of last year. Orders have softened some as supply comes in line with demand. For back-end process providers' capital expenditures (capex), 3D packaging and copper wire bonding for lower-cost solutions are currently a major focus. Most major tool segments will see growth in 2011, but advanced tooling should outperform the general market this year.
In 2011, the worldwide automated test equipment (ATE) market is expected to grow about 6.9%. Gartner's 2011 growth expectations are driven by the continued demand from system on a chip (SoC) and the advanced radio frequency (RF) segments of the market. Memory ATE will likely pull back in 2011 as DRAM capex softens. However, NAND testing platforms should remain strong this year.
Source: Gartner

N American-based manufacturers of semiconductor equipment posted a book-to-bill ratio of 0.97 for May 2011, down from 0.98 in April

(Chart 25) (Chart 26)
North American-based manufacturers of semiconductor equipment posted a book-to-bill ratio of 0.97 for May 2011, down from 0.98 in April.
The 3-month average of worldwide bookings in May 2011 was US$1.62 billion, 1.1% more than April 2011’s US$1.60 billion and 6.2% above the US$1.53 billion in orders posted in May 2010.
The 3-month average of worldwide billings in May 2011 was US$1.67 billion, up 2% from April and 24% above May 2010’s billings of US$1.34 billion.
"Three-month average bookings improved slightly in May and both bookings and billings are higher than one year ago," said Stanley Myers, president and CEO of SEMI. "As we approach the half-year point, the data substantiates global industry expectations for double-digit growth this year."
Source: SEMI

Notebook ODMs Becoming Conservative over 2H’11 Outlook

Notebook ODMs including Quanta Computer, Compal Electronics and Wistron have become more conservative about the business outlook for the second half of 2011 due to drastically changing market conditions in the US and Europe, and the deferred buying effect brought about by the planned launches of tablet PCs from brand vendors.
Factors including debt problems in Europe, steep falls of stock prices in the US plus its high unemployment rate are likely to work to undermine consumer purchasing, the sources pointed out.
Although back-to-school demand in September, and the Thanksgiving and year-end buying seasons are highly anticipated, most ODMs are not very active in building up inventories of parts and components.
Source: www.digitimes.com

Slowdown is Temporary says Fabricators & Manufacturers Association Economist

The current slowdown is temporary, despite much high-profile noise from the "gloom and doom brigade," and not the start of a another breakdown in the economy, according to Dr. Chris Kuehl, economic analyst for the Fabricators & Manufacturers Association, Intl. (FMA).
"Admittedly, some of this reaction is justifiable when one looks at the numbers released lately," said Dr. Kuehl. "The housing market is still skidding, the consumer has retreated in the face of more inflation threats and the jobless rate has worsened. The manufacturing sector in particular seemed to lose its position as the engine of the recovery."
Kuehl cites three reasons why the downturn will not last:

• Inflation is less worrisome. "Perhaps the most important factor is the unexpected surge in inflation that occurred at the start of the year, "Kuehl said. “This is not yet an increase in the all-important core rate that motivates the Fed to make decisions, but when the real rate of inflation spikes there is an almost instant consumer reaction, when the inflation comes from hikes in commodity prices. Kuehl said oil prices may head down soon and gas prices have already eased slightly. More important, inflation is not manifesting in a way that will shift consumer behavior permanently. The three reasons for inflation- commodity price increases, shifts in the wage structure, and an abundance of money in the system - aren't all there. Inflation is the only factor so far. "The inflation pressure felt by the consumer is coming from fuel and food, and there may be some modest relief on the way for both of these sectors," he explained. "If the consumer thinks that the threat of much higher pricing is not so immediate, they will likely relax and get back to their old patterns."
• Earthquake declines easing. Kuehl sees much of the recent downturn stemming from issues caused by the Japanese earthquake, especially supply stream interruptions. "The Japanese are already starting to recover, most of those parts will be flowing soon, and by the end of the year there will be a return to some semblance of normal," Kuehl said.
• Recessionary conditions are fading. Some of the conditions blamed for the expansion of the recession are fading, which will be more observable in the months ahead, according to Kuehl.

"Observers are a little baffled that banks and corporations have more money on hand than they have had in years, but that cash is not going anywhere," Kuehl said. "The banks are sitting on it in part to contend with the wave of rule changes that stemmed from the Dodd Frank legislation, and partly because they have returned to their old-school ways. Slowly but surely, the new system is getting in place, and banks are interested again in expanding their business through loans.
The Industrial sector: "the big drop has been in inventory build"
"It is likely the export demand will return, although in fact it has not declined all that much in the past few months," Kuehl said. "The big drop has been in inventory build, and until the consumer gets more aggressive there will not be a drawdown sufficient to provide much impetus for the manufacturer."
Kuehl added: "As in most other recoveries, the consumer will hold the key."
Source: appliancemagazine.com