The October book-to-bill ratio, used by the semiconductor equipment industry as a financial indicator, is back on the way up. The October figure, released at the end of last week by the Semiconductor Equipment and Materials International trade association, showed a ration of 0.73, meaning that for every $100 of goods shipped only $73 of new orders were received. Anything below 1.00 shows a shrinking market. But the figures look a lot more encouraging than the September ratio of 0.56. Bookings were 31% up on the previous month, but still 61% below the same period last year. The downturn has been the worst in the industry’s history. Earlier this month, Theodore O’Neill, semiconductor capital equipment analyst at Needham and Co told investors that from September 1997 to September 1998 bookings fell 68%. This level hasn’t been seen since 1993 when all the companies in this space were a quarter of the size they are today. Where previous down cycles had shown a rapid snap-back, O’Neill pointed out that it’ll take four consecutive quarters of 33% growth in orders just to get us back to where we were in September 1997.
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