SMH: Did a Data Error Mislead Us About the Extent of Semiconductor Oversupply?
When Semiconductor Equipment and Materials International (SEMI), the industry trade organization for semiconductor equipment makers, reported the January book to bill ratio for chip equipment, we were concerned.
Unfortunately, just when it looked as if things might be set to turn the semiconductor companies re-accelerated their pace of equipment orders over the last two months.
Until orders for semiconductor equipment start growing at less than the roughly 10% growth in demand for semis, there will continue to be the brutal pricing environment we have seen recently. The decent guidance and calling of bottoms are pipe dreams.
But now it appears there could be another reason for the datapoint we found so strange. According to Reuters.com:
Global sales of microchip-making equipment in February rose 16.6 percent from a year earlier on demand for tools to make and process silicon wafers, an industry group in Japan said on Friday.Sales of gear used to make semiconductors rose to $2.72 billion in February, the Semiconductor Equipment Association of Japan (SEAJ) said.
The group also restated sales figures for January, saying sales rose 17.2 percent year-on-year to $3.49 billion, instead of a previously stated rise of 34.5 percent to $4.01 billion.
A member of Semiconductor Equipment and Materials International, a California-based industry group, had given the wrong sales numbers, the SEAJ said in a statement.
Then SEMI reported adjusted figures. Here is what the numbers looked like in February as originally reported:
And here is the new and improved data:
The March numbers will be reported Thursday. Given that the supply/demand imbalance is the main contributor to our bearishness, a continuation in this trend would mean we are much closer to adopting a neutral/bullish outlook for semis. We can’t wait for Thursday’s release to find out.
Disclosure: William Trent has a long position in SMH.
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[…] SMH: Did a Data Error Mislead Us About the Extent of Semiconductor Oversupply? […]
[…] According to Semiconductor Equipment and Materials International (SEMI): North American-based manufacturers of semiconductor equipment posted $1.42 billion in orders in March 2007 (three-month average basis) and a book-to-bill ratio of 1.00 according to the March 2007 Book-to-Bill Report published today by SEMI. A book-to-bill of 1.00 means that $100 worth of orders were received for every $100 of product billed for the month. We’ll work on the assumption that the numbers are correct this time. You can’t get much closer to flat than 2.3% year/year. […]