Semiconductor manufacturing equipment continues to recover from a mid-2012 downturn. Based on data from SEMI and SEAJ, bookings (orders) began to pick up in December 2012. The book-to-bill ratio was over 1.0 from December 2012 through February 2014. Billings (shipments) surged in March through May of 2014 driving the book-to-bill below 1.0. The billings surge was likely due to a catch up of shipments from the backlog built up over the prior year. June 2014 billings dropped 17% from May while bookings dropped 1%, driving the book-to-bill up to 1.08.
The outlook for semiconductor manufacturing equipment looks healthy through 2015. Gartner’s July 2014 forecast shows capital expenditures increasing 7% in 2014 and 9% in 2015. Wafer fab equipment is expected to bounce back from an 8% decline in 2013 to 16% growth in 2014 and 9% in 2015. SEMI’s July forecast is for even stronger growth in fab equipment, 23% in 2014 and 9% in 2015. Gartner projects a deceleration in semiconductor market growth from 4.9% in 2015 to a sluggish 2.3% in 2016. Capital expenditures and wafer fab equipment are each expected to decline 4%. A moderate pickup in semiconductor market growth in 2017 and 2018 leads a return to growth for capital expenditures and wafer fab equipment.
| Annual Change, US$ | Source | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 |
| Semiconductor Market | Gartner | 5.0% | 6.7% | 4.9% | 2.3% | 3.5% | 4.4% |
| Capital expenditures | Gartner | -1% | 7% | 9% | -4% | 6% | 9% |
| Wafer Fab Eqpt. | Gartner | -8% | 16% | 9% | -4% | 9% | 8% |
| SEMI | -12% | 23% | 13% |
If the Gartner and SEMI forecasts are reasonably accurate, the industry will see moderate growth in the next few years with a mild slowdown in 2015. Not as exciting as some of the wild up and down cycles the industry has experienced in the past, but preferable to most semiconductor companies and investors.