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Thu, Aug 23, 2001 - Page 21 News List

Semiconductor equipment orders up

US RECOVERYAlthough last month's orders for new equipment were still 74 percent below the US$2.9 billion in July of last year, the trend is now improving

BLOOMBERG , SAN JOSE, CALIFORNIA

Orders for US-made semiconductor equipment have been rising since May, revised figures from an international trade organization showed.

In July, average monthly orders increased 5 percent to US$764.2 million, from a revised US$727.5 million in June, Semiconductor Equipment and Materials International said. That's the third consecutive month-over-month increase in orders and may be a sign that the decline in demand for new chip-making equipment has flattened out, said Michael Droeger, a spokesman for SEMI.

"This is the first time that we're showing orders trending upward," Droeger said. "We're reporting a three-month moving average and revised the numbers for May and June. Last month, we were still showing a downward trend."

July orders for new equipment were still 74 percent below the US$2.9 billion in July of last year, and the book-to-bill ratio in July was 0.67. That means that semiconductor-equipment makers received US$67 of new orders for every US$100 of shipments. A ratio of less than 1 indicates a contracting market. Orders, or bookings, refer to the new orders companies receive from their customers in a given month. Shipments, or billings, refer to the previously ordered goods they send and bill to their customers.

"The increase in orders is positive news and a bit of a surprise, particularly since July is historically a weak month for semiconductor equipment," Brett Hodess, an analysts at Merrill Lynch, said. "It may be indicative that the we have bottomed out and that orders will stabilize."

In May and June, average orders increased less than 1 percent from the previous month, according to the revised SEMI figures.

The three-month increase in orders isn't a sign that semiconductor-equipment makers can expect a significant jump in demand in the near term, Hodess said.

SEMI represents more than 2,400 companies in the semiconductor and flat-panel display equipment and materials industries.

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