As predicted by industry analysts, sales of semiconductor manufacturing equipment are still slowing as evidenced by semiconductor industry association SEMI reporting Tuesday that Q3 billings for worldwide semiconductor manufacturing equipment were $11.13 billion, just 1 percent higher sequentially from Q2 and up approximately 1 percent year-over-year from Q3 2006.

Q3 worldwide semiconductor equipment bookings were $8.93 billion, marking a 23 percent drop from Q3 2006 and, and 10 percent less than Q2 bookings.

Last month, market research firm Gartner Inc. predicted that the semiconductor order slowdown which started in Q1 is now evident, and therefore the firm lowered expectations for the semiconductor manufacturing equipment market in 2008.

Gartner expects capital expenditure to move from slightly positive this year at 1.5 percent and wafer fab equipment (WFE) at 6.4 percent, to slightly negative at negative 4.4 percent growth and negative 1.3 percent respectively for next year.

For the back-end equipment markets, Gartner forecasts a market contraction of 3.4 percent for packaging and assembly equipment (PAE) and a contraction of 4.8 percent for automated test equipment (ATE).

The overall equipment market is predicted to slow, with growth slightly positive, at a mere 0.3 percent. The WFE and the back-end segments will exchange places, as WFE declines 1.3 percent, while PAE grows 5.5 percent and ATE increases 7.3 percent, the firm said.

SEMI noted that its data is gathered in cooperation with the Semiconductor Equipment Association of Japan from more than 150 global equipment companies that provide data on a monthly basis.

Stanley T. Myers, president and CEO of SEMI said in a statement, “The industry continues to see modest quarterly growth in billings. While bookings appear to have peaked for the year, some regions, specifically Taiwan and China, are expected to experience significant growth given the strength of the first two quarters.”