Burgeoning Biz Fuels Demand for Refurbished Chip-Making Equipment

Taipei, April 21, 2006 (CENS)--A significant business upturn has promoted the world's first-tier chipmakers, including Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics, to join second-tier makers to vie for refurbished equipment, badly straining the supplies.

Chairman T.H. Kuo of used-equipment supplier Topco Scientific Co., Ltd. Pointed out that his company has been recently saddled with excessive orders for its equipment for making chips on 150-mm and 200-mm wafers.

Executives of Applied Materials' global service unit pointed out that the unit's used-equipment sales soared 20% last year, when most equipment suppliers suffered loss in brand-new equipment sales. Refurbished-equipment business unit ranked Semiconductor Manufacturing International Co. (SMIC), He Jian Technology (Suzhou) Co., Ltd., Samsung Electronics and TSMC as its top four customers last year.

The Applied Materials' executives pointed out that SMIC and He Jian have been their company's top two customers for used equipment for two consecutive years and orders from TSMC and Samsung made the market a little unusual.

Currently, used chip-making equipment mostly come from North America, Europe and Japan. Chemical mechanical polishing (CMP) and physical vapor deposition (PVD) systems have been the most best-selling machines in the market.

North American-based manufacturers of semiconductor equipment posted a book-to-bill ratio of 1.04 for March, meaning that US$104 worth of orders were received for every US$100 of product billed for that month, according to the Semiconductor Equipment and Materials International (SEMI) trade group on April 18.

In March, the equipment suppliers received US$1.35 billion worth of orders, up 5% from US$1.29 billion registered a month earlier and a 37% gain from the same period of last year.

The SEMI book-to-bill is a ratio of three-month moving averages of worldwide bookings and billings for North American-based semiconductor equipment manufacturers.

Insiders of the used-equipment industry pointed out that tight demands had compelled equipment suppliers to lengthen delivery time to four months.