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January 14, 1987

SEMICONDUCTOR BOOK-TO-BILL RATIO BACK ABOVE PARITY AT 1.08

By CBR Staff Writer

The Semiconductor Industry Association’s book-to-bill ratio jumped back above the magic 1.0 level in December – but analysts caution that, like the trade figures, not too much should be read into one month’s statistics. The December figure, 1.08, compares with 0.99 in November and 0.96 in October. Representing the ratio of new orders to parts shipped, the December figure reflects orders for the three months to December up 8.8% at $786.1m compared with orders for the three months to November – and 29.8% up on the same period a year ago; and December shipments of $786.1m, up 14.7% on the November figure and up 18.4% on shipments in December 1985. While the figures have been hailed in some quarters as a geniune indicator of incipient recovery in the ravaged semiconductor industry, more seasoned observers attribute the improvement to modest restocking – at some point the bins at every manufacturer still in business must become empty – and to strong demand for parts from makers of AT-alikes. The figures are also thought to have been distorted by large gains made by a very small number of manufacturers included in the Industry Association’s sample – no doubt the ones making key AT chips. If so, the apparent recovery may well turn out to be another false dawn, the last of which peaked last April before going dark again.

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