NEW YORK: North American makers of microchip-making equipment saw both orders
and shipments rise in December, indicating a slight improvement in the battered
sector, the industry trade group said on Tuesday.
New orders rose about seven per cent to $652.4 million in December, from
$609.3 million in November, according to Semiconductor Equipment and Materials
International. Shipments rose to $834.9 million from $829.5 million in November,
an increase of less than one per cent.
A closely watched ratio of orders to shipments, known as the book-to-bill
ratio, was 0.78 in December, an improvement from a ratio of 0.73 in November.
The ratio indicates that $78 of new orders were received for every $100 of
products shipped in December.
Stanley Myers, president and chief executive of the trade group, said there
were signs that chip factories were busier and increasing output, especially in
the assembly and testing areas. But he also warned that chip equipment companies
remained cautious.
"Chip and equipment companies, however, remain cautious about the
near-term outlook because of uncertainty with the overall economic
recovery," Myers said in a statement. The book-to-bill ratio topped the
expectations of Mark FitzGerald, a chip equipment analyst with Banc of America
Securities, who had expected a ratio of 0.75.
In a research note earlier Tuesday, FitzGerald said the industry was
beginning to see signs of a recovery, as chip makers place orders for advanced
equipment to increase the efficiency of their production. "We are seeing
the first evidence of a re-acceleration in technology buys after the collapse in
order following September 11th," FitzGerald said.
"But the overhang of excess capacity and a ... slowdown in chip industry
growth rates suggest to us that the slope of the recovery will likely fall well
below prior recoveries," he said. FitzGerald said he expected the monthly
book-to-bill ratio to reach 1.0 -- meaning that $100 of new orders are received
for every $100 of products shipped -- by May.
(C) Reuters Limited.