You thought that January’s US Semiconductor Industry Association book-to-bill ratio was a bit of a shocker when it came in at only a provisional 0.93, down from a lusty 1.12 for December, didn’t you? You were living in a fool’s paradise, because now that the San Jose trade lobby has rechecked its sums and tidied up its figures, it turns out that the figure was only 0.92. And the provisional figure for February, at 0.90, is even worse, although, reflecting the air of unreality that seems to hang over all markets just at the moment, the Association, whistling in the dark, claims that the February figure is good news because it means the decline is slowing down. The 0.90 figure is smack in the middle of forecasts, which ranged from 0.88 to 0.93. New orders for chips slumped 4.5% last month to $3,900m while shipments were up 1.8% at $4,340m compared with the December figure. Orders were up only 5.7% on the year ago figure where shipments were up all of 31.6%. The semiconductor marketplace appears to be stabilizing, said Doug Andrey, Director of information systems and finance for the Association, unconvincingly. The new numbers suggest that the dramatic drop in January was a one-month aberration. Overall, we continue to expect solid growth for the semiconductor industry throughout 1996 because the global consumer demand for chip-related products such as personal computers is going to increase for the foreseeable future. The numbers were rationalized as the fruit of an inventory glut, particularly for high-capacity dynamic random access memory chips, and price cuts by Intel Corp – but the inventory glut simply reflects the fact that the personal computer market has slowed unexpectedly, and no-one should under- estimate the damage that the deeply sick German economy can inflict. Germany, where people are now openly talking of the need for a government of national unity to put in place the deeply unpopular measures demanded by Economic & Monetary Union under the Maastricht Treaty, has run hard into the buffers. They are rather less inclined to view these things through rose-colored glasses in the Far East, and shares in Samsung Electronics Co Ltd, now the world’s largest memory chip maker, fell 5.9% on the news. For all of calendar 1995, the book-to-bill ratio was well in the money, ranging from a low of 1.12 in February and again in December, to a high of 1.19, which was recorded in July.
