Equipment B to B drops to 0.86

DECEMBER 9--The VLSI Research Inc. October Industry Pulse Pro showed that front-end capacity utilization totaled 84.4%, down from September's revised 85.6%. That number is projected to fall to 79% in November and drop further to 76.6% in December, according to VLSI. Additionally, VLSI said that worldwide equipment sales totaled $2.25 billion in October, while bookings were at $1.94 billion, resulting in a book-to-bill ratio of 0.86, down from the September book-to-bill ratio of 0.89. VLSI Research is forecasting that November's book-to-bill ratio will drop to 0.85.

In pursuit of profitability, IC makers are cutting production to raise prices, according to VLSI Research. At the same time, they are adding capacity inexpensively by relying on equipment discounts--there is a fair amount of order cancellation and then rebooking at lower prices.

In other industry news, Japan's global tool orders in September totaled 50.1 billion yen, up 58.5% from September 2001's 31.6 billion yen, according to the Semiconductor Equipment Association of Japan (SEAJ). Additionally, the 50.1 billion yen is a 61% increase from August's total of 31.1 billion yen.

Global sales in September were up from August and up year over year, according to the SEAJ. September sales were 133 billion yen, up from August's sales of 60.1 billion yen and up 17.8% from last September's 112.9 billion yen.