The semiconductor industry released a preliminary report of its main supply-and-demand gauge today, surprising Wall Street with higher numbers than expected.
The industry's book-to-bill ratio for August came in at .90, rebounding from July's numbers and to what had largely been a slow climb since March. The book-to-bill figures for North and South America, which reflect the ratio of the number of orders booked to the number of receivables billed, were released by the Semiconductor Industry Association after the markets closed.
"Most people were looking for .88," said Dan Niles, an analyst with Robertson Stephens. "So it's going to be a positive surprise for the markets tommorow and positive news for semiconductor companies."
Niles noted that the ratios had been improving since March, although they fell in July. "The three worst months tend to be January, July and August, with August usually being the worst of the three," he said.
The association also announced it revised July's ratio to .86 from .85.
Bookings for August reached $2.84 billion in new orders, up nearly 1 percent from $2.82 billion the previous month. But the new order gains were offset by a 3.2 percent drop in billings to $3.15 billion, compared with $3.26 billion in receivables in July.
Although the ratios have largely improved since March, it has not returned to the break-even point of $100 in new orders for every $100 in shipments. Niles predicts that September's ratios will reach between .97 to 1.00.
But not all analysts were thrilled with the August figures.
"The rise in the ratio can be attributed to a decline in billings, and that's not good," said Gary Grandbois, an analyst with Dataquest. "The ratios show how fast we're going down. We're not dropping down as fast as we were, but we're still going down."