The ratio of semiconductor sales to equipment bookings is currently at an historic high of 21.1 that will only worsen into 2006, according to The Information Network. In the past 10 years, the semiconductor industry has gone through four major upturns, peaking in February 1996, October 1997, October 2000, and the current up cycle that started in January 2002 and has currently reached record revenues of nearly $230 bln. Likewise, the semiconductor equipment industry has also gone through four major upturns, peaking in February 1996, October 1997, October 2000, and June 2004. During these equipment peaks, the ratio of semiconductor sales revenues to equipment bookings was 6.2, 5.3, 6.5, and 13.8. Currently the ratio stands at an unprecedented 21.1.
The Information Network forecasts semiconductor sales to grow 6.8% in 2006 while equipment sales will decrease another 3.0% on top of a 9.6% drop in 2005, which will result in a further increase in the ratio of semiconductor sales to equipment bookings in 2006. Semiconductor equipment will drop 19% in Q4 2005 over Q4 2004. Sequentially, Q4 2005 over Q3 2005 revenues will drop 13%. The semiconductor equipment market is geared to increase 23.5% in 2007 and 31.0% in 2008. Contributing to the deviation from an average ratio of 6.0 is the move to 300mm wafers. In 2000, less than 20% of tools sold were for 300mm, and more than 95% of the installed base of equipment was geared to 200mm. This is in contrast to 300mm representing 60% of tools sold in 2004 and 70% in 2005. 300mm wafers yield 2.25 times the number of chips per wafer compared to 200mm wafers.