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Chip-Equipment Makers' Book-to-Bill Ratio Rises in January
Chip-Equipment Makers' Book-to-Bill Ratio Rises in January
Mountain View, California, Feb. 18 (Bloomberg) -- The U.S. semiconductor-equipment book-to-bill ratio, which measures demand for U.S.-made tools used in making computer chips, rose to 1.10 in January as orders climbed for a fourth month.
A ratio of 1.10 means that U.S. chip-equipment makers took in $110 in new orders for every $100 of shipments. A ratio higher than 1.00 indicates a growing market. Semiconductor Equipment and Material International, which reports the ratio, increased the December book-to-bill to 0.97, from 0.94, though it revised down orders and shipments for the month.
Orders for new equipment are gaining after falling for much of last year, as chipmakers scaled back plans to build new plants amid falling prices and oversupply. The higher book-to-bill means that companies such as Applied Materials Inc., Novellus Systems Inc. and Applied Science & Technology Inc. may be poised for increased sales.
January's ratio ''indicates that aggressive activity'' upgrading operations ''should continue to improve equipment industry business levels in 1999,'' SEMI President Stanley Myers said in a statement.
January orders rose 10 percent to $957.7 million, according to the SEMI report, from a revised $869.2 million in December. Shipments fell 3 percent to $868 million, from a revised $895.2 million in December.
Applied Materials Inc., Novellus Systems Inc. and KLA-Tencor Corp. are the largest makers of ''front-end'' chip equipment. The largest maker of ''back-end'' tools is Teradyne Inc.
Front-end tools are used to prepare chips, deposit thin layers of wiring and insulation to build circuits and inspect for defects. Back-end machines test and package chips.
Applied Materials's shares fell 1 1/8 to 66 1/4 today. Novellus rose 3/4 to 69 5/8. Applied Science & Technology Inc. fell 1/16 to 14.
KLA-Tencor Corp. rose 9/16 to 59 7/16. Teradyne rose 7/8 to 59. The book-to-bill ratio was announced after the close of U.S. markets.
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