Leading Chip Index Recovers During August

An important gauge of the semiconductor industry’s performance rose again in August after a month’s setback, a trade group said Tuesday.

The Semiconductor Industry Assn. said the so-called book-to-bill ratio, which measures new orders against shipments, was buoyed by a modest increase in new orders to 0.90 in August from a revised 0.86 in July. (See Investor Spotlight, D10)

The index means that for every $100 in shipments, semiconductor firms received $90 in new orders. An index above 1.00 normally means demand for computer chips is expanding while a ratio below one means demand is slowing.

The ratio is used to measure the health of the North American chip market by comparing the value of new orders with the value of chips shipped. North America is the largest segment of the $156-billion-a-year global semiconductor market.

Industry analysts had expected the August ratio to be between 0.86 and 0.92. The July ratio was revised slightly from 0.85.

The association said new orders rose 0.9% last month to $2.84 billion from $2.82 billion in July. The gain was offset by a continuing decline in billings, which fell 3.2%.