SEMI adds optimistic note to memory pricing report

There’s some good news today in SEMI’s release of its October book-to-bill ratio, which stood at 1.10 as North American-based semiconductor equipment manufacturers posted $756.2 million in orders during the month (on a three-month-average basis).”The SEMI book-to-bill number has been above 1.0 for four months now, reflecting small and generally steady increases as the semiconductor industry continues a slow recovery,” said Stanley T. Myers, president and CEO of SEMI. From 0.73 in May and 0.8 in June, the figure stood at 1.06 for July and August, rising to 1.17 in September, and dropping to 1.10 in the preliminary October figures. Commented Myers, “Bookings in October 2009 have flattened, and we will continue to watch this number. SEMI maintains our forecast of a slowly improving capital spending outlook for the remainder of 2009 and into next year.”

The SEMI report comes on the heels of a Converge report that notes that prices are increasing for DDR2 and DDR3 memory modules. Reports Converge, “Earlier in the year market expectations were for another down year for the memory market, and yet at the close of business for October, the DDR2 and DDR3 markets had experienced eight straight months of rising prices. Clearly, computer builders did not see this coming or they would have forecasted for more supply in the second half of 2009. Most builders are getting caught short, and savvy buyers are finding that the spot market has been instrumental in assisting with supply shortages.”

Companies getting caught short in their search for parts as the recovery takes hold is an issue I commented on in May in “‘Just in time’ to prevent a recovery?” It’s easier to ramp down production during a downturn than to ramp it back up during a recovery. As Converge reports, “Micron parts in particular have been on a lot of contract manufacturers’ radar screens for shortages, with lead times running 10-plus weeks.”