A 2.9% decline in demand caused the US computer chip industry?s book-to-bill ratio to fall to 1.10 in December, down from 1.16 in November. The ratio compares the value of chips shipped in the US to the value of new orders received.
The slip had been expected by the semi-conductor industry, whose strongest business month is typically November as suppliers prepare for additional demand at Christmas. Bookings fell from a November total of $3.98 billion to a December figure of $3.87 billion. The 1996 figure was 23% down from the 1995 December total of $5.01 billion.
The figures are the last set that will be compiled using the current ratio system. The Semiconductor Industry Association, which sponsors the ratio, feels that this method is no longer accurate enough and may be giving a false impression of the health of the industry.
The association intends to replace the ratio with regular reports on global semiconductor shipments which will provide analysis of market conditions two weeks prior to the publication of the data. The reports will include non-US sales which are often excluded from the ratio method, even though suppliers generate more revenue from international sales than domestic.
But the new data will not include forward projections of market prospects, which could be calculated from the ratio method by analysing how many orders for new semiconductors had been placed.
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