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Tech Industry

Chip equipment orders rise again

And that, of course, is good news, according to the trade group releasing the early figures, calling it a "promising sign" that the industry is on the mend.

Semiconductor equipment orders outpaced shipments again in April, another sign that the chip market may be on the road to recovery.

Preliminary figures released late Thursday by the trade group Semiconductor Equipment and Materials International (SEMI) showed April orders of $982 million, up 17 percent from the revised March total of $836 million. April orders also showed a 36 percent year-over-year gain compared with April 2001's $721 million.

April billings, meanwhile, amounted to $822 million, up 3 percent from March's $798 million.

The figures established that the ratio of orders to shipments, known as book to bill, rose to 1.20 in April, from March's final ratio of 1.05, according to SEMI. The 1.20 ratio means that $120 worth of new equipment orders were received during the month for every $100 worth of equipment shipped.

April's figure is also an improvement over February's revised figure of 0.90.

The book-to-bill ratio has shown steady improvement for the last five months, indicating that chipmakers are beginning to expand their manufacturing capacity after deep cutbacks in 2001. April 2001 was the nadir for the book-to-bill ratio in recent years. That month the ratio hit a 10-year low, sinking to 0.42.

However, despite the healthy jump in bookings, April's three-month average of billings was still well down from April 2001 billings of $1.65 billion.

Though billings still have a way to go, SEMI said April's ratio shows that a recovery, as expected, is beginning.

"While the jump in April's numbers likely reflect an end-of-quarter uptick in bookings, the fact that we have seen bookings improve for five consecutive months is a promising sign that the market for semiconductor equipment is beginning to recover from the downturn of 2001," SEMI Chief Executive Stanley Myers said in a statement.

SEMI said it was particularly encouraged by announcements from several large chipmakers that they intend to increase capital spending for 2002, building new factories or outfitting projects that were delayed during the downturn.

The Semiconductor Industry Association, another trade group, expects chip sales to increase slightly from $139 billion in 2001 to about $150 billion this year.