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Industry Posts Highest Bookings In More Than Three Years

January 14, 1988

CUPERTINO, Calif. (AP) _ The U.S. semiconductor industry closed out the year with a surge when product orders for December reached the highest level in over three years, industry officials said.

Average monthly bookings, or orders, for the three-month period ending in December were $1.04 billion, a 5 percent increase from the previous month. Those figures are the highest bookings level since July 1984, when $1.13 billion was recorded, said the Semiconductor Industry Association, which released the figures.

″It means there has been no afember 1987, the last quarter-ending month, according to the SIA. The December 1987 billings were 25 percent higher than the December 1986 figure.

″The increase in the book-to-bill ratio for December is driven by strong business conditions in end-use markets such as personal computers and engineering workstations,″ said Doug Andrey, SIA’s manager of Industry Statistical Programs, in a news release.

Three-month average billings for December were $924.2 million, producing a book-to-bill ratio of 1.13. The current book-to-bill ratio means that semiconductor companies received $113 in new orders for every $100 worth of chips they shipped in December.

The 1.13 book-to-bill ratio was up from a revised 1.06 in November and 1.09 in October.

″I think it’s sustainable,″ said Thomas Thornhill, chip analyst at Shearson Lehman. He said chip orders should continue to climb through at least the first half of 1988 based on three factors.

These factors include a vast array of new data-processing products that use semiconductor chips, a strong shift toward digital products that have a higher chip content than older analog devices in the telecommunicati ons industry, and higher overseas sales based on the declining value of the dollar.

Sayegh disagreed, criticizing the SIA’s data collection methods.

″I view any conclusions based on these numbers with a good deal of skepticism,″ Sayegh said. ″In my experience, the SIA numbers are always screwed up; they are always being revised.″

He said the numbers are either wrong or there should be serious concern because the sudden jump in orders cannot be justified by underlying demand among customers.

SIA, a Cupertino-based trade organization, compiled the statistics from a preliminary survey of key semiconductor manufacturers taking part in the World Semiconductor Trade Statistics program.

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