Cooking the books and book-to-bill
Given the current state of affairs in the IC industry, it's hard to take this data seriously. Worldwide orders for Japanese-based semiconductor equipment makers grew to 112.06 billion Yen in the month of May alone, a 48.9% growth rate over the like period a year ago, according to the Semiconductor Equipment Association of Japan.
This represents the highest order rate since January of 2001. And the book-to-bill ratio for Japanese equipment makers climbed to 1.61 in May, from 1.26 in April, according to the industry trade organization. The ratio topped the key 1.00-mark in April for the first time since January 2001.
Does this mean that Japan's chip-equipment makers are recovering? Hardy. Recent financial reports from Japanese equipment makers tell a different story. Just check the data.
The numbers just simply don't add up, leaving observers to wonder if someone isn't cooking the books, or, that is, the book-to-bill.
Human nature to blame for downturn
Human nature is largely to blame for the deep recession in the semiconductor and related industries. So says Cupertino, Calif.-based market research firm Advanced Forecasting Inc. (AFI) .
"Forecasts based on human opinion snowballed into even more extreme extrapolations, artificially inflating real IC demand in the most recent silicon cycle," according to AFI.
"Total semiconductor demand has been painfully slow to increase after bouncing along the bottom since September 2001, and affiliated industries continue in agonizing wait for additional signs of improved business conditions," according to the firm.
To help the industry, AFI's founder, Moshe Handelsman, will conduct a seminar on chip forecasting at the Semicon West trade show next month.
"In light of its worst recession, the semiconductor Industry deserves proven forecasting techniques that add an objective input to a company's planning process," said Handelsman in a prepared statement this week. "Key decision-makers need not be influenced by extrapolations from qualitative sources such as customers, sales departments, and analysts that rely on surveying these sources," he said.
Still more trouble for human chip company
What else is new? There's more trouble for Applied Digital Solutions Inc., a supplier of "human" chips. Late in 2001, Applied Digital announced a tiny wireless ID chip that can be implanted in humans for medical, security, and related applications.
But it's been downhill ever since the company's big product announcement. Recently, the company's stock was halted after the U.S. Food and Drug Administration (FDA) asked for more information about the company's chip. Then, five individuals, including two FBI agents, were allegedly involved in a stock manipulation scheme that included Applied Digital's shares.
Then, the company has been hit with two shareholder suits. And now? This week, Applied Digital announced that it and one of its shareholders filed a lawsuit in the U.S District Court for the Southern District of New York against Knight Trading Group Inc. and Knight Securities LLC.
The lawsuit alleges that the defendants "engaged in a pattern of deceptive trading practices to manipulate the price of Applied Digital stock for its substantial pecuniary gain," according to the company.