HALF MOON BAY, CA  -- This year's semiconductor downturn will be short and relatively painless thanks to lessons learned from the past, according to a panel of analysts at a recent SEMI conference.

The consensus is for semiconductor device sales growth to be flat in 2005, while chip equipment sales will be down from 10 to 15 percent, said analysts participating in the ISS press conference. Excess inventory currently in the supply chain will be worked out of the system by the second quarter, and the second half will be better, they said.

Semico Research Corp. forecasts a 4.7% decline in semiconductors this year after 28% growth in 2004. "Although we're calling for a decline, we don't believe it's going to be as steep or as long as what we saw in the previous decline," said Jim Feldhan, president of Semicon. Double digit semiconductor growth will resume in 2006, at 14.6%, he added.

Longer term, Feldan is optimistic over the prospects for capital equipment market growth because of the rapid move towards more advanced semiconductor manufacturing technologies. In 2004, only 3% of wafer demand was for 90-nm technology, whereas the 90-and 65-nm nodes would account for 27% of wafers in 2008, according to Semico.

Moshe Handelsman, president of Advanced Forecasting Inc., said the softness experienced in late 2004 would continue into Q2 this year, after which growth will resume. In terms of wafer shipments, Advanced Forecasting sees a continued decline in shipments in 2005, although the decline will be mild. Handelsman said the industry has learned valuable lessons from the last downturn which will help it weather future periods of slow market growth. The recession of 2001 "frightened all the players," and they are now more lean and mean, he explained.

IC Insights is forecasting a decline of 2% in device sales this year, and 8 to 9% growth next year. "We are actually very encouraged about 2006," said Bill McClean, president of IC Insights. "We think most of the correction in this IC industry cycle will happen in the first half of 2005."

Structural changes in the industry - such as the increasing role of wafer foundries and a lengthening of the period between technology nodes - would lead to more efficient capital spending and decrease the magnitude of overspending in the chip industry, according to McClean.

IC Insights also predicts that in 2005 China will emerge as the world's largest consumer of ICs, surpassing Japan and North America, account for more than 20% of global IC consumption. That's up from 7% in 2001.

The semiconductor materials market will continue to grow over the next several years, from $28 billion in 2004 to an estimated $34 billion in 2007, noted Dan Tracy, senior director, industry research and statistics for SEMI. In 2005, the market for packaging materials will grow 8% to just over $11 billion, while wafer fab materials will grow 6% to almost $17 billion, according to a SEMI forecast.

Double digit growth will be experienced by some materials sectors, including low-k dielectrics, SOI, solder balls, CMP and laminate substrates. In the period from 2004 to 2007, compound annual growth rates for silicon wafers shipments will be 4.5% globally, and 10% in Asia Pacific, according to Tracy.

Gartner Dataquest is forecasting about 5% growth in semiconductor device sales this year, and a drop of 15% for capital equipment. Klaus-Dieter Rinnen, managing vice president, semiconductors, said the downturn in 2005 will be "shallower and shorter" than 2001. "By the end of Q1 we should be moving out of the [current] excess inventory situation," he said.

Rinnen noted that, unlike during the last down cycle, the industry this time has two weapons to defend itself. "Cost control will be its shield protecting companies against market pressures, but innovation will be its sword with which companies can actively defend and stimulate and open new markets," he said.

Wavics was founded in 2000 and is privately held. It employs approximately 55 people,

GUANGDONG PROVINCE, CHINA -- Are wages among factory workers in China about to rise? Reports from several news sources seem to indicate that a massive shortage of manpower coupled with modest inflation of the national currency will lead to higher costs for manufacturers later this year.

Global Sources this week said that inflation is ahead due to anticipated appreciation of the China's currency, the yuan, against the U.S. dollar. The timing is especially bad for the region, which has endured steady price inflation and flat wages. Local companies are facing persistent labor shortages and China has been recording more than 2 million vacancies annually, Global Sources said.

Separately, a report today said the local government is set to raise salaries for workers by 16.7%, to $70 a month.

SAN JOSE  -- The 90-day moving average sales of North American-based semiconductor equipment manufacturers was $1.24 billion in December, good for a book-to-bill of 0.95, according to SEMI.

For the month $95 worth of orders were received for every $100 of product billed.

The three-month average of global bookings in December was $1.24 billion, down 7% from revised November figures but up 4.6% year-on-year.

Global billings were $1.31 billion, down 2.6% from November and up 36% percent from a year ago.

"Based on these preliminary figures, we now expect worldwide sales of new semiconductor equipment by North American suppliers to total $16.5 billion in 2004, an increase of more than 60% over the prior year," said Stanley T. Myers, president and CEO of SEMI. "The cyclic bookings peak occurred in June 2004 and total bookings in December are 23% below that level."
 

SAN JOSE, Calif., January 20, 2005 -- North American-based manufacturers of semiconductor equipment posted $1.24 billion in orders in December 2004 (three-month average basis) and a book-to-bill ratio of 0.95 according to the December 2004 Book-to-Bill Report published today by SEMI. A book-to-bill of 0.95 means that $95 worth of orders were received for every $100 of product billed for the month.

The three-month average of worldwide bookings in December 2004 was $1.24 billion. The bookings figure is seven percent below the revised November 2004 level of $1.33 billion and 4.6 percent above the $1.18 billion in orders posted in December 2003.

The three-month average of worldwide billings in December 2004 was $1.31 billion. The billings figure is 2.6 percent below the revised November 2004 level and 36 percent above the December 2003 billings level of $963 million.

"Based on these preliminary figures, we now expect worldwide sales of new semiconductor equipment by North American suppliers to total $16.5 billion in 2004, an increase of more than 60 percent over the prior year," said Stanley T. Myers, president and CEO of SEMI. "The cyclic bookings peak occurred in June 2004 and total bookings in December are 23 percent below that level."

The SEMI book-to-bill is a ratio of three-month moving averages of worldwide bookings and billings for North American-based semiconductor equipment manufacturers. Billings and bookings figures are in millions of U.S. dollars.

SAN JOSE, Calif., January 20, 2005 -- North American-based manufacturers of semiconductor equipment posted $1.24 billion in orders in December 2004 (three-month average basis) and a book-to-bill ratio of 0.95 according to the December 2004 Book-to-Bill Report published today by SEMI. A book-to-bill of 0.95 means that $95 worth of orders were received for every $100 of product billed for the month.

The three-month average of worldwide bookings in December 2004 was $1.24 billion. The bookings figure is seven percent below the revised November 2004 level of $1.33 billion and 4.6 percent above the $1.18 billion in orders posted in December 2003.

The three-month average of worldwide billings in December 2004 was $1.31 billion. The billings figure is 2.6 percent below the revised November 2004 level and 36 percent above the December 2003 billings level of $963 million.

"Based on these preliminary figures, we now expect worldwide sales of new semiconductor equipment by North American suppliers to total $16.5 billion in 2004, an increase of more than 60 percent over the prior year," said Stanley T. Myers, president and CEO of SEMI. "The cyclic bookings peak occurred in June 2004 and total bookings in December are 23 percent below that level."

The SEMI book-to-bill is a ratio of three-month moving averages of worldwide bookings and billings for North American-based semiconductor equipment manufacturers. Billings and bookings figures are in millions of U.S. dollars.

SAN JOSE, Calif., January 20, 2005 -- North American-based manufacturers of semiconductor equipment posted $1.24 billion in orders in December 2004 (three-month average basis) and a book-to-bill ratio of 0.95 according to the December 2004 Book-to-Bill Report published today by SEMI. A book-to-bill of 0.95 means that $95 worth of orders were received for every $100 of product billed for the month.

The three-month average of worldwide bookings in December 2004 was $1.24 billion. The bookings figure is seven percent below the revised November 2004 level of $1.33 billion and 4.6 percent above the $1.18 billion in orders posted in December 2003.

The three-month average of worldwide billings in December 2004 was $1.31 billion. The billings figure is 2.6 percent below the revised November 2004 level and 36 percent above the December 2003 billings level of $963 million.

"Based on these preliminary figures, we now expect worldwide sales of new semiconductor equipment by North American suppliers to total $16.5 billion in 2004, an increase of more than 60 percent over the prior year," said Stanley T. Myers, president and CEO of SEMI. "The cyclic bookings peak occurred in June 2004 and total bookings in December are 23 percent below that level."

The SEMI book-to-bill is a ratio of three-month moving averages of worldwide bookings and billings for North American-based semiconductor equipment manufacturers. Billings and bookings figures are in millions of U.S. dollars.

SAN JOSE, Calif., January 20, 2005 -- North American-based manufacturers of semiconductor equipment posted $1.24 billion in orders in December 2004 (three-month average basis) and a book-to-bill ratio of 0.95 according to the December 2004 Book-to-Bill Report published today by SEMI. A book-to-bill of 0.95 means that $95 worth of orders were received for every $100 of product billed for the month.

The three-month average of worldwide bookings in December 2004 was $1.24 billion. The bookings figure is seven percent below the revised November 2004 level of $1.33 billion and 4.6 percent above the $1.18 billion in orders posted in December 2003.

The three-month average of worldwide billings in December 2004 was $1.31 billion. The billings figure is 2.6 percent below the revised November 2004 level and 36 percent above the December 2003 billings level of $963 million.

"Based on these preliminary figures, we now expect worldwide sales of new semiconductor equipment by North American suppliers to total $16.5 billion in 2004, an increase of more than 60 percent over the prior year," said Stanley T. Myers, president and CEO of SEMI. "The cyclic bookings peak occurred in June 2004 and total bookings in December are 23 percent below that level."

The SEMI book-to-bill is a ratio of three-month moving averages of worldwide bookings and billings for North American-based semiconductor equipment manufacturers. Billings and bookings figures are in millions of U.S. dollars.

SAN JOSE, Calif., January 20, 2005 -- North American-based manufacturers of semiconductor equipment posted $1.24 billion in orders in December 2004 (three-month average basis) and a book-to-bill ratio of 0.95 according to the December 2004 Book-to-Bill Report published today by SEMI. A book-to-bill of 0.95 means that $95 worth of orders were received for every $100 of product billed for the month.

The three-month average of worldwide bookings in December 2004 was $1.24 billion. The bookings figure is seven percent below the revised November 2004 level of $1.33 billion and 4.6 percent above the $1.18 billion in orders posted in December 2003.

The three-month average of worldwide billings in December 2004 was $1.31 billion. The billings figure is 2.6 percent below the revised November 2004 level and 36 percent above the December 2003 billings level of $963 million.

"Based on these preliminary figures, we now expect worldwide sales of new semiconductor equipment by North American suppliers to total $16.5 billion in 2004, an increase of more than 60 percent over the prior year," said Stanley T. Myers, president and CEO of SEMI. "The cyclic bookings peak occurred in June 2004 and total bookings in December are 23 percent below that level."

The SEMI book-to-bill is a ratio of three-month moving averages of worldwide bookings and billings for North American-based semiconductor equipment manufacturers. Billings and bookings figures are in millions of U.S. dollars.