Semi gear on the mend; recovery around the corner?

The recession, at least in the US, apparently is at an end, after nearly two years. One promising sign is the uptick in business for semiconductor production equipment, as reported by Semiconductor Equipment and Materials International (SEMI), an industry trade group which tracks the orders and shipments reported to the organization by North American equipment suppliers.

Equipment industry conditions bottomed out in the first quarter of this year, according to SEMI. The organization’s monthly book-to-bill report follows how orders (bookings) are corresponding to shipments (billings). A ratio of 1.0 indicates orders and shipments are in balance and the North American equipment industry is seeing generally healthy conditions. A ratio above 1.0 usually indicates the industry is in a growth mode, and that’s what’s been seen in recent months.

The preliminary book-to-bill figure for September was 1.17, meaning $117 worth of orders were received for every $100 worth of equipment shipped and billed to customers. SEMI’s book-to-bill ratio hit its nadir in January of this year, when it was 0.47. The ratio slowly crept up through June and broke into positive territory in July.

The other side of the monthly figures is less cheery, however. The North American equipment industry for years booked and shipped more than $1 billion of equipment each month. Shipments fell to a low of about $386 million in April of this year, while orders touched a low of nearly $246 million in March. For September, orders were around $733 million, while shipments were almost $625 million (figures are subject to revision), according to SEMI.

The semi equipment industry still has a way to go to return to previous prosperity; it seems its darkest days are now in the past.

~Photo by A. M. Kuchling, used under a  Creative Commons license.