SEMI's July 2011 semiconductor equipment numbers are in for North America here. The latest book-to-bill numbers show a retreat in the ratio for July, dropping to 0.86 from June's 0.94, moving back into the territory we last saw in February of 2011, at 0.87. The ratio indicates that for July US $86 in orders were received for every US$100 in product billed.
While the July numbers are down month-over-month, these three-month moving averages level out the some of the more dramatic ups and downs in the semi supply chain market. Basically, what we see is confirmation that the anticipated and much discussed 'pause' in the market during the summer did indeed take place. Furthermore, the overall data indicate that we are still holding onto gains from 2010, just that we are not building on those gains at this point.
The bookings numbers hold the worst news: July 2011 bookings were down to US $1.298 billion from June's US $1.54 billion, a 15.7% decline month-over-month, and a 29.3% decline year-over-year from July 2010. The July 2011 bookings are also the lowest this year, underscoring the lack of confidence in markets that has been building since earlier this summer. Presently, there is a drop in utilization and capacity builds across the semi industry due to the hesitation and uncertainty over global market confidence levels and economic stability, as we have tracked closely in the past weeks here in MarketWatch Commentary.
The billings numbers tell a bit of a different story, thankfully. The July 2011 billings for North American semiconductor equipment dropped to US $1.52 billion, down from June's US $1.64 billion, a decline of 7.6% month-over-month, but still a 1.4% increase over the July 2010 billings level of US $1.50 billion, according to the latest report from SEMI.
The fact that there is still a year-over-year increase in billings provides positive support for the market assessment that argues for the current industry situation to be a 'pause' rather than a decline or a true slowdown. This is an important difference, these data lend some weight to the analysts' forecasts of a market pause to last roughly a quarter and then a rebound as we move into 2012, as we discussed in this mid-July post from MarketWatch Commentary, and echoed in this early August report by SEMI here (read more from SEMI's Global Updates here).
Despite the present pause, which we should move through slowly, but hopefully surely over the next quarter, 2011 is still on track to be an expansion year for semiconductor equipment sales, growing by roughly 12%, and tracking to be the second highest Wafer Processing spending year in history, lead by Taiwan, North America and S. Korea, according to this SEMI report.