Is the Recession Over for Equipment Suppliers?

I always thought that at some point the name of my blog would become a liability. An anachronism. At some point the high tech equipment industry would recover to the point that it would no longer be trying to survive a recession, and my blog title would be… be obsolete! Yahoo!

Is it Time to Take “Recession-Proof” Out of My Blog Title?

In other words, is the recession over for American high tech companies?

One American company has told me they are very, very busy. They have orders. Service engineers are busy with installations and training. There is hardly any time to get engineers up to speed on PBET. I don’t think their positive story is the only one.

Apart from anecdotal reports from various semiconductor suppliers, there are statistics that say things are improving this year… but still not as good as last year. And last year had a pretty bad ending! For example, one measure reported by SEMI has been total square inches of raw silicon wafers shipped to end users for processing. What we see is an improvement during Q3-2009 from Q2-2009; yet the picture is not as good as one year ago:

Q3-2008: 2,243 sq. in. shipped
Q2-2009: 1,686 sq. in. shipped
Q3-2009: 1,972 sq. in. shipped

And then there is the book-to-bill ratio stats (BTBR) for North American headquartered semiconductor equipment producers. A little review: a BTBR above 1.0 is considered positive. We went for 29 straight months with a BTBR under 1.0 (Feb 07 to Jun 09). Nothing like that has occurred during the available data (starting 1991). Altogether the BTBR hit 1.2 or above 33 times (14%) since 1991, but the last time was way back in December of 2003. Along such lines:

Clearly, the last 6 years have been painful compared to previous years (except for the big bad 2001, of course). According to Stanley T. Myers, president and CEO of SEMI:

The SEMI book-to-bill number has been above 1.0 for four months now, reflecting small and generally steady increases as the semiconductor industry continues a slow recovery. Bookings in October 2009 have flattened, and we will continue to watch this number. SEMI maintains our forecast of a slowly improving capital spending outlook for the remainder of 2009 and into next year.

This is what the last four months has looked like in contrast to the last three years:

So is the Recession Over?

Keep in mind that the BTBR figures above are for North American headquartered equipment suppliers. As we all know, many of these companies have moved manufacturing to Asia - including the one mentioned in my opening anecdotal report. The worst of the layoffs were a year ago, but downsizing continues here and there (Sun Microsystems announced 3000 cuts in October).

This blog was created at the beginning of 2009 and is intended to be of help to high tech equipment trainers. When I use the word recession, I think of people (jobs, homes, food), not the corporate entities (BTBR, stock indexes, corporate profits).

I am not aware of much hiring in the equipment supplier training organizations. There are still many trainers out of work. For those trainers (instructional designers, e-learning experts, and related staff) still at work, the pressure to produce-more-with-less has never been more demanding.

The national unemployment picture is actually getting worse according to the Bureau of Labor Statistics (BLS):

The “official rates” (U3) that you hear in the news all the time refer only to people who: “do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work.” However the BLS also gathers information in 6 groups, with U6 being the most comprehensive: “Total unemployed [U3], plus those who are ‘Marginally attached workers’ — those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past.”

A subgroup of “marginally attached workers” are the “discouraged workers” - those who are no longer looking because of one of four reasons: (1) They believe no job is available to them in their line of work or area; (2) They had previously been unable to find work; (3) They lack the necessary schooling, training, skills, or experience; (4) Employers think they are too young or too old, or they face some other type of discrimination.

It is a bit harder to extract figures for the semiconductor equipment industry. But again, here is some additional nation-wide statistics.

So despite the uptick, the recession continues to impact those currently employed by or formerly employed by high tech equipment suppliers such as those in the semiconductor industry. The recession may be over for high tech companies, but certainly the recession is not over for high tech workers.

I plan to continue the multiple points of focus in this blog.

ideas for unemployed colleagues to start their own small or home business.
ideas for unemployed colleagues to find employment.
ideas for trainers to improve their training skills and contributions to their company.

I guess it’s a bit premature to change the name of this blog.

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