Book-to-bill ratio hits 0.81 as billings decrease - News - according to Semiconductor Equipment and Materials International

Electronic News, Feb 25, 2002

Semiconductor equipment orders keep rising, according to Semiconductor Equipment and Materials International (SEMI). January saw the book-to-bill ratio climb to 0.81 from 0.77 the previous month. A book-to-bill ratio of 0.81 means North American-based manufacturers of chip equipment saw $81 worth of new orders for every $100 of product billed for the month.

Worldwide bookings averaged $636.9 million in January (three-month average basis), 1.3 percent above the revised December level of $628.5 million. January's bookings were 66 percent below the $1.9 billion in orders posted in the same month a year-ago.

However, the three-month average of worldwide billings did not increase, instead falling 4 percent to $784 million from the revised December 2001 level of $819.3 million. This was 66 percent below year-ago levels of $2.3 billion.

"Front-end equipment bookings are at a low point for this downturn," said Stanley Myers, president and CEO of SEMI, in a statement. "The improvement in overall equipment bookings, was driven by a 50 percent increase in the final manufacturing bookings. January marks the second consecutive month in which bookings for the final manufacturing equipment segment increased significantly from its previously weakened state."

Shekhar Pramanick, an analyst with Prudential Securities, said the book-to-bill ratio came in at the low end of his expectations. The ratio's modest improvement from the previous month was caused by strong sequential growth in back-end orders, along with a modest decline in overall shipments, he said.

According to Pramanick, back-end orders in January increased 49.8 percent from the previous month, while front-end orders fell from December's revised orders of $541.5 million to $506.6 million. Pramanick said the decline in orders could be caused partly by technicalities regarding recognition of backlog cancellations from Applied Materials Inc. in January.