Computer Chip Orders Surge to 4-Year High
The semiconductor book-to-bill ratio, a leading indicator for U.S. manufacturers of computer chips, rose to 1.19 in April from 1.17 in March, the highest since May last year, a trade group said Tuesday.
The Semiconductor Industry Assn. said bookings or orders for semiconductors reached a four-year high of $1.21 billion. Bookings last broke $1.2 billion in May, 1984, when they reached $1.23 billion.
Also, billings, or shipments, of chips to U.S. customers were worth $993.9 million in the four-week month of April, 8.1% lower than in March, the SIA said.
The SIA said its February book-to-bill ratio had been revised from 1.18 to 1.17.
The book-to-bill ratio is a comparison of new chip orders from customers with shipments filling old orders. The April ratio means that for every $100 worth of shipments made during the period, the suppliers took $119 of orders.
The three-month average bookings for the period ended in April totaled $1.21 billion, a 7.8% rise above the three months ended in March.
It marks the highest bookings level for a four-week month since May, 1984, when it reached $1.23 billion.
Expect 25% Growth
“The bookings increase is in all produce segments, not only specific memories or logic,” said Douglas Andrey, SIA’s manager of industry statistics.
“We are continuing to view 1988 with prospects of greater than 25% growth in the U.S., which is validated by the 17th consecutive month with the higher than 1.0 book-to-bill ratio.”
The April ratio was at the high end of industry analysts’ predictions of 1.14 to 1.19.
“It certainly was better than I anticipated,” said analyst Michael Gumport of Drexel Burnham Lambert Inc. “It is stronger than expected shipments as well.”
Chip prices rose about 1% to 2% again in the past week and have been rising at 30% annualized rate for the past six months.
“All the news in the chip industry is extremely positive,” Gumport said. “Every chip manufacturer I have spoken to says they are enjoying a very strong orders recovery.”
All chip makers performed strongly during the period, with National Semiconductor Corp. reporting very health business, analysts said. “(National Semiconductor) had been weak earlier this year and had some ground to catch up,” Gumport said.
