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Tech Industry

Chips on a roll

Semiconductor chip orders took a turn for the better in September, in fact, the biggest increase of the year, according to the Semiconductor Industry Association.

Semiconductor chip orders took a turn for the better in September when the book-to-bill ratio jumped to .99 for the month, marking the biggest increase of the year, according to figures released today by the Semiconductor Industry Association (SIA).

The ratio, which reflects the number of new orders against receivables, is the second consecutive monthly increase. But September's ratio was supported by stronger numbers, analysts said.

"In the past months, any improvements that came were a result of bookings increasing but billings falling," said C.B. Lee, an analyst with Hancock Institutional Equity Services in San Francisco. "But this time, both bookings and billings have moved in an upward direction.

August, which posted a higher ratio over the previous month with .90, saw an artificial improvement, Lee said. New orders increased over the previous month, but its ratio improved because billings declined 3.2 percent during the same period.

September, however, posted improvements in both new orders and billings, compared with the previous month. Its ratio also improved to boot, analysts added.

New orders reached $3.2 billion for September, up from $2.84 the previous month. Billings hit $3.23 billion, a slight increase from $3.15 billion in August.

Jeff Weir, SIA spokesman, said the industry will likely see a single-digit increase for the year, still short of the double-digit increases seen in 1995. "These trends have a habit of sorting themselves out. We're looking at a similar ballpark for the next few months. Rarely do you have a super high or low for the month."