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Chip sector shows some growth

Orders for semiconductor-manufacturing equipment are on the rise, despite inclement weather for the chip market.

Orders for semiconductor-manufacturing equipment rose in October, even though the chip market remained under the weather.

The North American semiconductor equipment industry posted a preliminary book-to-bill ratio of 0.71 for the month, according to data released this week by the trade group Semiconductor Equipment and Materials International. The ratio, which reflects a three-month moving average, compares the number of new orders placed for the manufacturing equipment with the amount of new gear shipped to customers. The 0.71 ratio means that $71 worth of new orders were received for every $100 of products shipped during the month.

The October ratio bests September's level of 0.64 and August's 0.62, SEMI said. In April 2001, the ratio hit its lowest point in 10 years, falling to 0.42--that is, the value of new orders received wasn't even half that of equipment shipped.

Meanwhile, October's $651 million average of order bookings was up 5 percent from September's $619 million. But orders have a long way to go to meet last year's multibillion-dollar levels. This year's October orders were 78 percent below the $2.99 billion in orders for the same month last year, SEMI said.

"Excess capacity and weak end-market demand continue to beleaguer the semiconductor equipment industry," SEMI CEO Stanley Myers said in a prepared statement. "While the decline in orders has abated, the average monthly shipment figure continues to weaken, and there is no appreciable indication of a near-term trend reversal."

The three-month average of worldwide billings for October 2001, $916 million, was 5 percent below September 2001's $967 million and 64 percent below October 2000's $2.57 billion.