The Semiconductor Industry Association (SIA) is abandoning it’s closely-followed American monthly book-to-bill ratio for a worldwide ratio, called the Global Billings Report, starting January 1997. But the SIA now seems to removed the ratio’s worth as an industry gauge by removing the bookings element. It’s therefore not a ratio, and as such useless for pin-pointing industry trends. Instead, the SIA will now produce reports from the Americas, Japan, Asia-Pacific excluding Japan and Europe. But before it disappears, the Americas-only ratio for October was up a healthy 17.9% at 1.10, the first time it’s got above the all-important 1.0 mark this year. The book-to-bill has been published monthly since 1978, and calculates the value of products ordered (booked) each month, against the value of products shipped (billed). A book-to-bill ration of less than one therefore indicates a negative market trend because orders are lower than sales. New orders in October rose to $3.74bn, up $566m on September and billings were also up. Last month’s ratio was revised slightly to 0.98, from 0.99 (CI No 2,996). The book-to- bill has been lower in the Americas than in most other markets during this year, and the suspicion is that the US semiconductor companies have grown tired of being unfavorably compared to their overseas counterparts, with the obvious exception of Intel Corp. Indeed, back in June SIA chairman Pat Weber told the seventh annual Bear, Stearns Technology Conference that the monthly book-to-bill ratio is a worthless indicator. We have to get a better leading indicator…you [investors] are making bad decisions based on the book-to-bill, (CI No 2,938). Weber is also acting CEO of Texas Instruments Inc, one of those that’s suffered the most this year. The San Jose, California-based SIA has 65 members, comprising all the major US semiconductor manufacturers and theUS subsidiaries of those from Europe and the Far East.
