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Japan chip equipment orders up 43.8%

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CIOL Bureau
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TOKYO: Orders for Japanese chip equipment rose 43.8 percent in July from a year earlier to 141.86 billion yen ($1.29 billion), an industry group said, as demand for chips used in computers, digital electronics and mobile phones remained strong.

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It was the 14th consecutive year-on-year rise, the Semiconductor Equipment Association of Japan (SEAJ) said in a report, although orders fell 13.8 percent compared with the previous month, the first decline in three months.

Reflecting robust capital spending by global chip manufacturers, orders had climbed to 164.53 billion yen in June, the highest since December 2000.

"Orders dropped off on a month-on-month basis, but we expect this high level of orders to continue for some time," said an official at SEAJ. "Factory utilization rates are very high and demand in all regions (of the world) is still strong."

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The SEAJ official said that orders for Japanese chip equipment were particularly robust out of Taiwan and South Korea and that demand was picking up considerably in North America.



Underscoring robust industry conditions, data last week showed the world's chip factories operated at their fastest rate in almost four years in April-June, boosted by demand for chips for cellphones and digital appliances such as flat-panel TVs.

The Semiconductor International Capacity Statistics (SICAS) group said the utilization rate was 95.4 percent in the period, rising from the previous three months for the sixth straight quarter.

The book-to-bill (BB) ratio, a key indicator of industry health that measures new orders against sales, was 1.06 in July, indicating that orders were above shipments during the month. But it marked a deterioration compared with June's ratio of 1.19.

Data released earlier this month showed that orders for chip equipment in July from North American makers surged on a year-on-year basis, but were roughly flat compared with June, suggesting the industry's recovery may be reaching a peak.

California-based Semiconductor Equipment and Materials International said orders received by North American chip gear makers more than doubled year-on-year to $1.61 billion in June.



The book-to-bill ratio was 1.05 in July for North American equipment, down from 1.07 in June.

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