The Semiconductor Equipment and Materials International book-to-bill ratio, which gauges demand for chip-equipment tools made in the US, rose to 0.54 in June, its second monthly increase.
A ratio of 0.54 means that US semiconductor-equipment makers took US$54 of orders for every US$100 of shipments. A ratio below 1 indicates a contracting market. June's ratio was higher than the revised 0.48 ratio in May because orders fell at a slower rate than shipments.
April's ratio of 0.44, the lowest the industry had seen in a decade, indicated a sharp decline in orders. Higher ratios since then aren't necessarily a sign of a recovery, analysts said.
"We hesitate to declare a reversal in order trends just yet," said Elizabeth Schumann, director of industry research for SEMI, a San Jose, California-based trade group.
"Shipments and orders continued to decline. Some specific equipment categories are showing modest improvement, which could be an indication that the industry is nearing the trough of the orders cycle."
Average monthly orders, or bookings, fell 1.3 percent in June to US$704.7 million from a revised US$714 million in May.
New orders were 75 percent below the US$2.86 billion posted in June 2000.
Sales last month fell 12 percent to US$1.31 billion from a revised US$1.49 billion in May. They were 42 percent below year earlier shipments of US$2.26 billion.
Applied Materials Inc, Lam Research Corp, Novellus Systems Inc and KLA-Tencor Corp are the biggest US makers of tools used to manufacture chips. Teradyne Inc is the biggest maker of semiconductor-testing equipment.
Executives at Applied Materials, the No. 1 chip-equipment maker, SpeedFam-Ipec Inc and Cymer Inc said they're becoming less optimistic that sales and profits will increase this year.
Analysts and investors had hoped for a turnaround in demand for electronic devices such as personal computers and cellphones in the second half as the back-to-school and holiday sales seasons approach. At last week's Semicon West trade show in San Francisco, chip-equipment company officials said that orders for their tools are unlikely to improve that soon.
"It will be the second half of 2002 before we see any recovery," said Robert Akins, chief executive of Cymer, which makes lasers used in chip production.
Applied Materials fell US$1.47 to US$43.58 on Monday. Lam Research dropped US$0.12 to US$26.03. Novellus fell US$0.14 to US$47.11. KLA-Tencor shed US$1.96 to US$49.21. Teradyne declined US$0.86 to US$32.04. Cymer rose US$0.50 to US$23.21.
The Philadelphia Semiconductor Index, which includes shares of Applied Materials, Novellus, Teradyne and KLA-Tencor among 16 stocks, dropped 16.55 to 557.75. It has fallen 3.3 percent this year.
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