Positive figures year-to-date for semicon; growth forecasted for 2014

USA: 2014 is off to a positive start. The WSTS/SIA reports strong IC unit shipment growth through April; and both the silicon and leadframe unit data collected here through SEMI show solid year-over-year growth comparisons as well.

In addition, a number of leading packaging houses have boosted their 2014 capex plans during the first quarter for investment in wafer bumping, wafer-level packaging, and other advanced applications. Of course, these plans are subject to change "depending on business conditions," but generally improving economic conditions along with a strong appetite for electronics are spurring the current growth prospects for the semiconductor industry.

In terms of developing market outlooks, the industry is perpetually seeking patterns and indicators in forecasting, though longer the time horizon the higher degree of unknowns and uncertainties there are in any forecast - and especially so for capital investments for leading edge semiconductor manufacturing. Examining a perspective of the current year outlook for the semiconductor equipment market, one can use the "simple bookings model."

This provides a correlation between first quarter equipment order growth (comparing current year 1Q versus 1Q of the previous year) with the overall equipment spending growth for the current year, and it does provide a reasonable projection - at least in terms of direction and magnitude - for annual equipment spending growth.

Global bookings in the first quarter of this year were about 27 percent higher than the first quarter of 2013 and point to a growth rate in the range of 15 to 20 percent for equipment spending in 2014 versus 2013 using the simple bookings model correlation. Year-to-date equipment billings are on the right track for growth, with 2014 billings through April approaching 30 percent year-over-year growth. In summary, following two years of declining equipment billings, 2014 looks to be a year for spending growth.