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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 203.14-0.8%Jan 9 9:30 AM EST
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To: niceguy767 who wrote (10054)9/23/2000 8:19:53 PM
From: david_langstonRead Replies (2) of 275872
 
NG,

In Jan, '97, the Semiconductor Industry Association (SIA) issued the last semiconductor book-to-bill ratio after collecting the data for 20 years. Many of the member companies in SIA felt that the ratio was being interpreted incorrectly by Wall Street and that the numbers were adversely affecting their share prices, so they terminated the publication of it. They now only publish semiconductor sales totals.

The ratios that you have referenced are based on the sales of and orders for semiconductor production equipment which are only indirectly related to cumulative chip sales levels and typically lag those sales by three to six months. This data is published by the Semiconductor Equipment and Materials International (SEMI) organization. Attempting to explain chips sales trends by the use of semiconductor equipment book-to-bill ratios would be a case of placing the cart before the horse.

The extremely high value of 1.46 that you cited is more a result of severe worldwide underinvestment in chip production capacity during the period from '98 to '99 than some measure of chip sales growth during the first half of this year.

I hope this clears up your confusion between the two ratios.

Dave
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