Semiconductor Industry Seen as Recovering

Times Staff Writer

A gradual recovery has begun in certain parts of the troubled semiconductor industry, despite continued overall weakness in August, the Semiconductor Industry Assn. said Wednesday.

The trade association’s monthly report on the industry’s book-to-bill ratio, one barometer of the semiconductor market, showed that only $74 in new U.S. orders were received for every $100 worth of outgoing shipments--about the same as in recent months.

But sharp improvements in orders for certain products and in the outlook for electronic equipment that uses semiconductors suggests “a strong semiconductor market recovery starting in 1986,” said Thomas D. Hinkelman, president of the industry association. “Short-term, things are still terrible.”

Hinkelman said orders for analog circuits, a type of semiconductor that didn’t have as large an inventory buildup last year as other types, have jumped about 36% so far this year, resulting in a near-normal 0.98 book-to-bill ratio.

“The balancing of orders with shipments means that the process of recovery is beginning, but we expect that it will take place over a number of months,” he said. He added that the recovery will occur at different rates for different semiconductor products.


For the year, the industry group says that U.S. demand for chips made by American, Japanese and European manufacturers will fall 28% below 1984. The downturn is considered the deepest in the industry’s history.