|
|
| Recovery of Semiconductor Equipment Business Takes a Pause While Chip Sales See Improvement |
|
Ed Wijaranakula, Ph.D.
Director of Market Analysis, Infotix
Systems, Inc. - September 5, 1999
Page
1 of 1
|
|
On August 20, the North American Semiconductor Equipment Industry posted the July, 3-month moving average for semiconductor equipment shipments of $1.264 billion, up 13.6
|
percent from July 1998. This represents a slight increase in semiconductor equipment shipments, compared to last month which was $1.259 billion. The estimated 1999 year-to-date semiconductor equipment shipments is $7.517 billion, down 19.6 percent from the same period last year, which was $9.352 billion. From our analysis, the July data yields an annualized decline for the semiconductor equipment business of 7.39 percent, compared to 1998.
The July book-to-bill ratio of 1.11 represents the fifth straight month of decline since it peaked in March.
|
|
According to Reuters, Mark Fitzgerald, a Merrill Lynch analyst, suggests that the rate of acceleration in the book-to-bill should continue to slow over the next few months, as shipment momentum continues to build.
Mr. Miliand Bedakar, senior semiconductor analyst at Solomon Smith Barney, in an interview on CNBC, suggested that stock prices of chip equipment companies could be stuck in their trading ranges as new chip equipment orders reach a plateau. Applied Materials, the world's largest chip equipment maker, which recently announced that future bookings would be lighter than analyst's expectations, could face a near-term issue about bookings growth, according to
Mr. Anurag Pandit, vice president and portfolio manager of John Hancock Funds, in an interview with CNBC.
Some good news from the semiconductor sector came from the Semiconductor Industry Association (SIA), who posted July global semiconductor sales of $11.55 billion, up 19.32 percent from July 1998. The sales figure is, however, 6.3 percent below our estimation of $ 12.33 billion based upon the SIA June forecast. The 1999 year-to-date global semiconductor sales are $78.38 billion, up 8.9 percent from the same period last year, which was $71.96 billion. Based upon the July result, global semiconductor sales are growing at the annualized rate of 7 percent, according to our analysis.
|
|
|
Mr. George Scalise, President of SIA, suggested that the improvement in chip sales are attributed to in part by strong demand in PCs, which is in agreement with the earnings report issued by Dell computer (NASDAQ:DELL) for the quarter ending July 1999. DELL, the world's largest direct seller of PCs, has reported year-to-year revenue growth of 42 percent, almost three times higher than that of semiconductor business growth during the same period.
Our analysis shows that the percentage of semiconductor equipment shipments based on global semiconductor sales continues to slow down. The chip makers may continue to cut capital spending while increasing utilization of semiconductor foundry services. Based upon the June SIA forecasted global semiconductor sales of $140.8 billion for 1999, or a 12.1 percent year-over-year increase, we estimate average monthly global semiconductor sales for the rest of this year to exceed $12.48 billion. Based upon these figures, we are expecting to see global semiconductor sales for August 1999 to grow at least 27 percent higher than last year.
Page
1 of 1
|
|
|
|
About the Author: Dr. Ed Wijaranakula is presently the Director of Market
Analysis at Infotix Systems, Inc. Prior to Infotix Systems, he has worked with
Intel, Hewlett-Packard, Micron, Motorola and Texas Instruments and has held senior as well
as managerial positions in semiconductor manufacturing companies. He has published over 80
technical papers and holds 12 U.S. and foreign patents. His portfolio holds long
position
or control in DELL.
|
|
|
|
