The Road To RecoveryThe Road To Recovery

The chip-equipment industry is still on the road to recovery, but at least it's heading in the right direction. Orders increased slightly for North American semiconductor-equipment manufacturers in January, according to a report published by Semiconductor Equipment and Materials International, a trade group for manufacturers of equipment used to build semiconductor devices.

Using a three-month average that compares new orders to equipment sold, the trade group reported a January book-to-bill ratio of 0.81 for North American chip-equipment manufacturers. Translation: On average, $81 worth of new orders were received for every $100 of product billed for the month. That was up from December's revised book-to-bill ratio of about 0.78 (or $78 worth of new orders received for every $100 of product billed), and a vast improvement from six months ago, when the August book-to-bill was 0.62.

"January marks the second consecutive month in which bookings for the final manufacturing equipment segment increased significantly from its previously weakened state," Stanley Myers, the group's president and chief executive, said in a statement. The bookings recorded for January (based on a three-month average) were $636.9 million, rising 1.3% from December's $628.5 million. Year-over-year comparisons are still in the doldrums, though. January's figure is down 66% compared with January 2001's order average of $1.85 billion.

The January results are certainly an improvement, says Brooks Gray, Technology Business Research analyst, but they reflect the fact that the chip market has reached a mature stage that's prone to minimal, rather that explosive, growth.