Chip-equipment demand slowing

Semiconductor manufacturing equipment orders fell in December, according to a trade association--yet another indication of grim months ahead for chipmakers. Semiconductor Equipment Manufacturers International (SEMI), based in San Jose, Calif., reported Wednesday that December was the second month in a row in which orders had fallen.

The average number of orders compared with sales--known as the book-to-bill ratio--fell in December to 1.03 orders for every one sale, versus 1.12 orders for November and 1.16 in October. A ratio above 1 means demand is outpacing current capacity.

The book-to-bill ratio is the average of three months of equipment orders booked versus the average equipment shipments for the same three months for the North American industry. SEMI said the three-month average of orders booked worldwide in December totaled $2.5 billion, 10 percent less than November's average.

The December 2000 total is still 29 percent higher than December 1999's $1.9 billion. This underscores the fact that the semiconductor equipment manufacturing industry saw its largest growth year in history, according to SEMI. But Stanley Myers, president and CEO of SEMI, said to expect a tough first half of 2001 because of a decline in the microprocessor market. --John G. Spooner, ZDNet News