Rate of New Orders for Computer Chips Slows

The closely followed book-to-bill ratio for computer chips, an indication of the rate of new orders, declined in August, the Semiconductor Industry Assn. said Monday.

Analysts said the decline reflected a summer slowdown.

The August book-to-bill semiconductor ratio dropped to 1.02 for the three-month period ending in August, compared to 1.09 in July.

The industry trade group said average monthly bookings for the past three months dropped 4.1% from the prior three-month period, while actual billings, or shipments, rose.

A 1.02 ratio means that the semiconductor makers received $102 in new orders for every $100 in shipments. A much bigger order figure over actual shipments would reflect a strong demand for chips that producers were not satisfying fast enough.

“The decline in the book-to-bill ratio indicates that as lead times become shorter and as capacity comes on stream, shipments are fulfilling customer needs in a more timely fashion,” said Douglas Andrey, manager of industry statistical programs for the association.

Analysts anticipated a summer slowdown in orders to result in a lower book-to-bill, but expected between 1.05 and 1.07 instead of the 1.02 reported.

Average monthly bookings, or orders for the three-month period that ended in August, were $1.208 billion, a 4.1% drop from bookings of $1.260 billion recorded for the period ended in July and 25.4% above year-ago bookings of $964.3 million.

Billings, or shipments, of chips to the U.S. market in August reached $1.180 billion, 6.1% higher than July’s $1.113 billion.