On a year/year basis, the slowdown in both orders and sales of semiconductor manufacturing equipment is even more apparent.
Although it may seem otherwise, we view this as a positive sign for the industry. To us it means that the overcapacity issue is in the process of being corrected. While orders for new equipment are still growing faster than end demand, the gap narrowed significantly in October and at this rate could evaporate altogether as early as year-end. While it will still take a few months for inventory levels to work down, the market may well look past the worst of the fundamentals.