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Chip-equip orders signal recovery

Orders for semiconductor equipment eked out a small increase in January, indicating that the industry is embarking on a slow recovery, says an industry trade group.

Orders for semiconductor equipment eked out a small increase in January.

The North American semiconductor equipment industry posted a preliminary book-to-bill ratio of 0.81 for the month, according to data released Wednesday by the trade group Semiconductor Equipment and Materials International. December 2001's revised book-to-bill ratio was 0.78.

The book-to-bill ratio, published by SEMI, is a three-month average that compares the number of new orders received with the amount of new equipment shipped. January's 0.81 ratio means that new orders worth $81 were received for every $100 worth of equipment shipped. Generally, a book-to-bill ratio over 1 indicates that the industry is receiving more orders than it can fulfill--a good sign for manufacturers.

SEMI also said the average value of orders posted in January rose 1.3 percent to $636.9 million from December's $628.5 million.

Together, the increases in orders and value are evidence that the industry is embarking on a slow recovery, SEMI said in a statement.

After December's book-to-bill ratio was released, analysts theorized that 2002 equipment purchases from chipmakers such as IBM, Intel and Texas Instruments would spark a recovery in the first half of the year.

Despite January's increases, the chip-equipment industry still faces a difficult climb back to its previous levels. Last month's $636.9 million in orders was still 66 percent lower than January 2001's $1.85 billion, according to SEMI.