Now he tells us! The US Semiconductor Industry Association’s book-to-bill ratio is one of the most closely-followed indicators in the business, but now the Association itself has lost faith in it. Pat Weber, chairman of the Semiconductor Industry Association and also vice-chairman and acting chief executive of Texas Instruments Inc, told the seventh annual Bear, Stearns Technology Conference that the monthly book-to-bill ratio is a worthless indicator. We have to get a better leading indicato r, Reuters quotes him saying: You (investors) are making bad decisions based on the book-to-bill. The ratio has for years been greater than 1.0, indicating that chip customers were steadily increasing their orders month-to-month, but since January, it has plunged, and has been below 0.9 for the past three months, giving investors and the industry cause for concern. Weber called the recent weakness in semiconductor demand an expected correction brought on by three years of flat pricing, and said the correction itself will spur more demand. What we have to do is look at trends, Weber said, asserting that since the invention of the integrated circuit, the industry has grown an average of 13% to 15% a year. We think the long-term growth for this industry is going to be 15% to 20% a year. Weber said the Association would eventually move away from the book-to-bill ratio, which measures demand only in the US, to a more global indicator. We’re moving to a global index and were working to make it happen, Weber said, adding that If we don’t, you’re going to invent your own.Weber was a member of a panel at the New York conference that also included representatives of Intel Corp and SGS-Thomson Microelectronics NV, and all three said they expect world semiconductor markets to double in size to $300,000m by the year 2000.Following the ending without resolution of the government-to-government talks, the Electronic Industry Association of Japan hopes to hold talks with the Semiconductor Industry Association sometime next week. The talks between the industries have been suspended since late April as the two sides remain at odds over the role of governments in any new agreement. A top-level meeting originally scheduled for last weekend had been postponed indefinitely at the request of the US Association.
