By | Tony Smith 21st January 2005 11:09

Chip makers' book-to-bill ratio slips

Falling demand

Chip makers saw the ratio of new orders to shipped product fall last month, suggesting the semiconductor industry hasn't yet moved out of its current dip.

According to the Semiconductor Equipment and Materials International (SEMI) trade organisation, December 2004 yielded a book-to-bill ratio of 0.95, down from 0.99 the month before. SEMI's monthly figure is calculated from a three-month rolling average.

Essentially, chip makers won $95 worth of orders for every $100 of product billed during the month. A figure of less than one indicates falling demand - there are fewer orders for new product in a given month than orders shipped and invoiced.

According to SEMI, $1.24bn of orders were placed in December, down from $1.33bn in November but 4.6 per cent up on December 2003's total, $1.18bn. Last month, some $1.31bn worth of invoices were put in the mail, down from $1.34 in November, but rather more than the $963m reported for December 2003.

The figures do not bode well for the chip industry's 2005. Many observers now believe this year will see sales static over last year's total at best but more likely down. ®