05.24.2001
Historically low book-to-bill hints at industry bottom?

• SEMI (Semiconductor Equipment and Materials International) reported an April book-to-bill (B-B) ratio of 0.42, the lowest since January 1991 when SEMI first released this statistic.

• Bookings were down 41% MoM and 74% YoY last month, indicating that equipment manufacturers' revenues dried up during 2Q01. Equipment shipment was also down, falling 27% MoM and 17% YoY.

• Front-end B-B came in slightly better at 0.43 and backend at 0.42 in April. However, compared to the previous month, the rate of decline at both ends was similarly severe. Front-end bookings were down 41% and shipment 17%, while the respective figures for back-end bookings and shipment were 41% and 16%.

• Since September 2000 (the beginning of the current downcycle, or as SIA's (Semiconductor Industry Association) monthly billing revenues peaked), bookings have declined 75%.

• Comparatively, in the previous two downcycles in the past 10 years, B-B saw a 22% decline from peak to trough in the 1995-96 cycle and a 53% decline in the 1997-98 cycle.

• VB Primasia Opinion: A cautious approach is required in interpreting the B-B ratio as it is a lagging indicator. During the 1995-96 cycle, the industry bottomed out 3 months prior to the B-B upswing and hit a turnaround two months prior to the B-B recovery in the 1997-98 cycle. Nevertheless, if history is indeed in the process of repeating itself, industry recovery is already well underway.

LindaLiu@Primasia.com +886-[0]2-2547-8867